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Yamaha is in talks with Mahindra 2Wheelers for a “holistic business partnership”.
This could involve manufacturing and marketing tie-up, and help the Japanese bike maker compete more aggressively with Honda and Suzuki in India, several sources told Business Line .
If a deal comes through, it is expected to help Yamaha replicate its success in the premium 150cc bike segment in the key domestic mass biking segment (100-125cc) through low-cost manufacturing and Mahindra's large marketing strength. Mahindra would gain access to Yamaha's reputed technological prowess in two-wheelers.
Specific details of the talks were not available.
“There were comprehensive discussions going on …. They (Yamaha) wanted many things. They're looking at a holistic business partnership, which includes marketing and manufacturing,” a person close to the development said.
“Yamaha is a complicated organisation with many investors, so this is not a straightforward matter. Nothing has been finalised yet … the talks have not reached the investment stage.”
Another person in the know of the matter said that talks have started and that Mahindra could be rethinking its strategy after entering the two-wheeler market aggressively last year and then facing technical problems with its sole bike model — Stallio. A tie-up may now focus on technology or a licensing agreement.
A Mahindra 2Wheelers spokesperson declined to comment. India Yamaha Motor Ltd (IYML) official denied that such discussions were taking place.
In April, it was reported that Yamaha is looking for a strategic partner in India to help it develop and sell products for the mass domestic motorbike segment (100cc to 125cc). This segment represents over 70 per cent of the bikes sold in the country.
The Japanese bike maker had then called a pitch from around five merchant bankers in search for the right model for such a strategy. Options suggested included a technological tie-up and a production tie-up for low-cost manufacturing. The third option was a strategic stake sale by Yamaha to the partner as part of an agreement on technology and production.
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