TVS, the Chennai based Indian two wheeler manufacturer is has confirmed that it is holding talks with BMW Motorrad, the motorcycle division of BMW AG in an effort to obtain technological know how to build high end motorcycles.
TVS is not the first Indian firm to seek tech support from international firms. Hero MotoCorp and Bajaj Auto already have international partners. Hero is working with American firm Erik Buel Racing to develop engines while Bajaj has a 47% stake in Austrian bike maker KTM.
TVS chairman Venu Srinivasan has only disclosed the company was in talks with BMW Motorrad and has not revealed any additional information. A TVS BMW deal is vital for the Indian firm as it has to deal with competitors who already have exposure to international technologies.
The TVS BMW talks have gained prominence after the BMW Motorrad's president Hendrik Von Kuenheim praised the Indian firm during an interview to the Financial Times. He appreciated TVS' production facilities and even said TVS engine making facility was similar to a Formula 1 set up.
Reports on the TVS BMW talks claim the two companies are looking at technology sharing as well as joint marketing. BMW Motorrad is a premium bike manufacturer catering to a niche market. Any deal with TVS will help it expand its presence in India.
TVS will also stand to benefit from this deal as it will get access to technology developed over the years by BMW. TVS has been struggling to cope up with competition and has been pushed down to fourth place in sales this year. It needs to widen its product base and is looking to have high end bikes to improve its fortunes. TVS had earlier announced plans to build bigger engined bikes.
BMW Motorrad which also owns Husqvarna brand of on-road, off-road bikes can also help TVS develop an competitor to Hero Impulse. BMW and Husqvarna bikes are considered very expensive and have a limited say in the market. A TVS BMW deal can also result in these products being built here in India effectively bringing their price down to more affordable levels.
This deal is important to BMW as it can compete well against its global competitors such as Harley Davidson and Triumph which have already established their operations in India.