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Why coopetition makes sense for two-wheeler makers

Murali Gopalan | Updated on December 12, 2019

Torsten Bellon agrees that it makes sense for two-wheeler makers in India to consider ‘coopetition’ in this new era of disruptive mobility.

‘Coopetition’ refers to collaboration among competitors especially at the back end, in areas like sourcing and common platforms. “I think this makes absolute sense and you see a lot of this in the global passenger car segment,” he says.

He is, therefore, a “bit surprised to see how separated” the Indian two-wheeler industry is in contrast. While it is perfectly normal for manufacturers to guard their turfs and keep product development confidential, “it does not mean that they must not collaborate and share something”.

This, reiterates Bellon, makes sense especially in niche or low volume business. “When you are starting something with low volumes, combining investments benefits the customer through collaboration because of lower costs. And when you offer something less expensive, it makes sense,” he reasons. On electrification for instance, “why not combine skills for a certain product range” especially when volumes are low to begin with. Globally, there are efforts by former foes, Honda and Yamaha, to work more closely together even while their foray has largely been restricted to a small scooter space.

“As a supplier, we develop the same things for various OEMs,” says Bellon. It is quite natural to encounter “some resistance” since companies know that others are buying the same stuff too. This is a form of indirect collaboration “because they use us for the same product”.

Bellon believes the passenger car business wants to have an individual route for electrification and it is not taking off despite huge investments. This is because everyone has different specifications and there is really no standard in place yet.

“Everyone wants a different goal and this is one factor limiting the speed of change. I think it is a good opportunity for the two-wheeler industry at least in the early stages,” he says. By the end of the day, it boils down to volumes and economies of scale. This is where coopetition is important to take the story forward.

Published on December 12, 2019

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