BMW Motorrad says its tie-up with TVS Motor Company is not only to leverage a cost competitive manufacturing base. “If you don’t have the best quality of a premium product, then you have problems later on. India is the right place for high-quality mass production,” says Stephan Schaller, President, BMW Motorrad. Venu Srinivasan, Chairman, TVS Motor, also stresses this point sufficiently. Both the alliance partners spoke to Business Line on what lies ahead, as BMW gears up for emerging markets such as South East Asia and India with lower powered bikes, and TVS powers into a new category above 250-cc, a segment where it is not present now.

How will this partnership shape BMW’s focus on emerging markets?

Schaller: We are traditionally strong in our segments of 600-1,600 cc. We are internationally among the top three players. With smaller displacement and lower price level, we have the chance to enter so-called emerging markets which we cannot enter with our existing products. A country like India, one of the biggest populations in the world, is an interesting place for us. The new products will also be sold in our existing markets.

Does the TVS alliance also give you access to a lower cost manufacturing base?

Schaller: What impressed me most was the high quality of mass production I have seen here. This is more important than a low-cost base. India is the right place for high quality mass production — to source, produce, to ship to places in the world where we can sell them… and one of these places will also be India.

If you don’t have the best quality of a premium product, then you have problems later on. This is always more expensive than a high-cost one. This was why we finally thought TVS would be the best partner for us.

Which markets will you look at?

Srinivasan: We are not into any exclusivity. What is made as TVS with its branding, specifications, styling and features, which would be different from BMW, would be sold as TVS. Whatever is done the BMW way will be sold as BMW.

How big is this alliance really?

Srinivasan: For us, it is a privilege and honour. In terms of premium and quality, there is no company in the world higher than BMW. BMW is known for class, styling and pizzazz. We also bring to the table high-quality mass production. It is not low-cost cheap, mass production. The alliance of engineering and premium manufacturing and quality can be a big win-win for both of us. We are not willing to predict volumes. Our biggest bike today is 180-cc. So this gets us into the above 200-500cc segment. For BMW, which makes only above 650, this gets them products up to 500 cc. That is really the play we are working together. We are looking at specific outcomes. We look forward to it with a great deal of hope and aspiration.

(This article was published on April 8, 2013)
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