India’s TVS Motor and BMW in Talks for a Technological Alliance image

TVS Motor, India and BMW are in talks to create a technological alliance to develop a BMW-badged motorbike for the market.

BMW plans to expand in the Indian market and compete with local rivals Hero MotoCorp Ltd. and Bajaj Auto Ltd. as well as Japan’s Yamaha Motor Co. and Honda Motor Co.

“We will share more details on the nature of the talks in due course,” Venu Srinivasan, chairman of Chennai, south India-based TVS said.

TVS is no longer no.3 scooter and motorcycle maker after its sales declined sales in the last financial year. A technological alliance with BMW will help TVS arrest dwindling market share and expand its product portfolio in India. The company will be able to manufacture bigger and better equipped motorcycles to face the fast-changing Indian two-wheeler market.

Although currently two-thirds of motorcycle sales in India are from the entry-level segment, with 100-125 cubic centimeter range engines, the bigger motorcycles market is expanding quickly. In 2011 sales of motorcycles above 125cc were up 17% to 2.99 million units.

“A pact with BMW will change the fortunes of TVS,” said Deepak Jain, an auto analyst at Sharekhan Ltd. “TVS has been stuck with its products, and technology from BMW will help it become a major player in the bigger-motorcycle segment.”