New Delhi, July 7:
Eleven years after parting ways with Japanese partner Suzuki Motor Corporation, Chennai-based TVS Motor Company is looking at a new collaborator.
Its Chairman, Mr Venu Srinivasan, has confirmed that the company is in talks with premium German auto-maker BMW’s motorcycle division, BMW Motorrad, for a tie-up.
Though an equity sale by the two- and three-wheeler maker has been ruled out, sources said the partnership will likely involve a technology sharing pact and may also extend to joint marketing. Both partners reportedly see a strong gain as it could fill the gaps in their respective portfolios.
“We are in discussions with BMW for a tie-up, but at this point I can’t reveal more details. However, equity sale is not being considered,” Mr Srinivasan told Business Line .
Recent media reports have likened the partnership to the Bajaj-KTM tie-up, the difference being that Bajaj has a 47 per cent stake in the Austrian firm.
In the TVS-BMW partnership, TVS could use BMW’s expertise to extendits premium bike range, where it currently has the Apache (160cc, 180cc). BMW may get a strong local partner, helping it expand its network rapidly, gain market knowledge and cut manufacturing costs.
With an eye on volumes, premium player, US-based Harley-Davidson,has already set up a plant in Haryana. The UK’s Triumph has also purchased land in Karnataka.
Frugal Engineering
An analyst with a top European consultancy said it was necessary for any global bike-maker to have aserious focus on India — the second largest two-wheeler market after China. The developed markets are now saturated and Indian companies’ penchant for low-cost engineering is critical to drive cost efficiencies.
“If BMW wants volume growth, such a tie-up is necessary. TVS definitely has a good reputation in terms of processes.
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