TVS has recently joined hands with BMW Motorrad to jointly develop motorcycles for the Indian and international markets. Currently, TVS has motorcycles under 200cc, while BMW Motorrad sells motorcycles over 600cc, which means their is a significant gap between their line-ups. The 250-500cc segment is known as entry-level performance bikes, which are quite popular now-a-day. The reason is pretty clear, these mean machines provide both power and efficiency at an affordable cost. So, the entry level performance bike segment is the best segment to work on for this alliance, as the new line-up won't overlap their respective line-ups. The alliance will work on TVS’ engineering and manufacturing skills and BMW’s technical expertise in building performance motorcycles.
We have already seen that synergising strategies is quite successful in the automotive industry. The BMW-TVS alliance will also work on the same model on which some big players are already working like Nissan-Renault. So, both the brands will jointly develop a product and sell it under their names separately with minor tweaks to give them separate identities. By adopting this model, the product reaches to more buyers and you won't have to pay extra to develop separate products. BMW Motorrad is known for high end performance bikes and tourers and their smallest capacity motorcycle at the moment is the 650GS. In past few year, demands for such large capacity bikes have been shrunk and BMW is loosing its traditional markets, so it was necessary for them to reach new emerging markets. BMW Motorrad is always known for expensive bikes, and in emerging markets like India you have to keep the price in check. BMW's JV with TVS is the step in the same direction, it will help reduce the input costs to enter the sub-500cc segment.
“These products will be manufactured by us in India with two different styles, features and specifications, one for BMW for sale throughout the world and one for TVS,” added Srinivasan about the production plans. As we already reported the agreement is only for developing and producing motorcycles and it will be up to the individual companies to market and sell the motorcycles, which means that both TVS and BMW will share their products separately like before. However, in India, BMW has only two dealers at the moment. As the production of the newly developed products is expected to begin in India, BMW will have to develop a larger sales network, so they can match-up with the production. Stephan Schaller, President BMW Motorrad said, “In view of changing motorcycle markets, demographic developments, and increasing environmental demands we are expanding our product range so as to tap into fresh growth potential.” He further added, “In future we will be able to offer vehicles in smaller capacity classes in addition to the BMW Motorrad core segments.”