TVS Motors-BMW tie up in the works

In a bid to revive its flagging sales, falling market share and poor performance, TVS Motors is apparently it is in talks with luxury automotive major—BMW Motorrad—for a technological tie-up

TVS Motor Company (TVS) and BMW are in talks in a possible tie up to share technological know-how as TVS tries to battle intensive competition and to revive flagging sales. According to a filing with the Bombay Stock Exchange (BSE), TVS Motor Company is only in talks with German auto-maker BMW's motorcycle division-BMW Motorrad-for a technology tie up. However, nothing has been firmed up as yet.

This isn't the first time that TVS is in talks with an international player. In the past, it had a tie up with Suzuki for selling and marketing two-wheelers in India. After TVS and Suzuki parted ways, TVS continued to be successful and even used celebrities like Sachin Tendulkar and Mahendra Dhoni to help market its indigenously designed two-wheelers. However, intense competition and lack of competitive launches eroded its competitive advantage which kept its share price depressed. It sold 1,68,693 units in June 2012 against 1,82,456 units in June 2011, a fall of 7.54%. The company's quarterly cumulative, for the period April 2012 to June 2012, sales fell 3.17% at 5,19,160 units against 5,36,130 units recorded in the previous comparable period.
Honda is now the third largest player, after it divorced from Hero MotoCorp, having overtaken TVS Motor, with a market share of over 7%. TVS market share is seen hovering at 6% levels. Hero MotoCorp is the market leader at around 56% while Bajaj is around 25%. Bajaj Auto has a tie up with KTM, an Austrian motorbike manufacturer, where it owns 47%, to market its range of high-end motorbikes in India and acquire technological know-how.

BMW Motorrad is the motorbike division of the BMW Group, which makes high-end motorcycles using the BMW brand name. It also owns the well known Husqvarna motorbike brand. The latter manufacturers motorbikes used for uneven rugged terrain mostly found outside the cities (which could ideal for potholed roads, as well). It also manufactures dual-type used for street terrain as well. Both 2-stroke and 4-stroke are manufactured. At time of writing this piece, the TVS stock was up 8.47%, to Rs39.70.
 

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