Tvs Motors And Bmw Deal Marketing Essay

Indias 4th largest two Wheeler maker, TVS Motors is all set for a affiliation with German motor company, BMW Motorrad. The trade will assist both companies to raise their interest in the Indian two Wheeler market. By the understanding, BMW will research the top secrets of its driving engineering to add quality to the high terminal motorcycles. As TVS plans to present high terminal motorcycles with advanced engines in future, its joint venture with BMW will surely hike company ‘s production, quality and gross revenues.

Both trade names will do usage of each other ‘s expertness to develop their gross revenues. That is, while BMW will assist TVS with its proficient cognition to add quality to TVS motorcycles, TVS will supply its salesrooms and Centres to advance BMW ‘s high terminal bikes. The tie between TVS and BMW will ensue a immense competition in commuter every bit good as premium section. Earlier Hero Motocorp had besides announced a engineering tie-up with US-based bike maker, Erik Buell Racing ( EBR ) for its motor engines.A


TVS Motor has its beginnings back to the entrepreneurial spirit of Trichur Vengaram Sundaram Iyengar who gave up a moneymaking calling in the Indian Railways and in the banking sector to put up his ain concern. He started with Madurai ‘s first coach service in 1911 and founded T.V.Sundaram Iyengar and Sons Limited, a company that established its presence in the transit concern with a big fleet of trucks and coachs under the name of Southern Roadways Limited. When he died in 1955 his boies took over the reins of the company with several raids in the car sector including finance, insurance and industry of two-wheelers Surs and constituents. The group has managed to run 33 companies that account for a combined turnover of about $ 3 billion.

Initial old ages

Sundaram Clayton, so the flagship company, was founded in 1962 in coaction with Clayton Dewandre Holdings, United Kingdom. It manufactured brakes, fumess, compressors and assorted other automotive parts. The company set up a works at Hosur in 1978 to fabricate mopeds as portion of a new division. A proficient coaction with the Nipponese car giant resulted in a joint-venture Ind Suzuki Limited in 1982 between Sundaram Clayton Ltd and Suzuki Motor Corporation. Commercial production of the bikes began in 1984.

TVS-Suzuki relationship

TVS and Suzuki shared a 19 twelvemonth long relationship that was aimed at engineering transportation to enable design and industry of two-wheelers specifically for the Indian market. Rechristened TVS-Suzuki, the company introduced several theoretical accounts such as Suzuki Samurai, Suzuki Shogun and Suzuki Fiero. Differences of sentiment on how to run the joint venture finally led to the spouses traveling their ain separate ways in 2001 with the company being renamed TVS Motor, releasing the rights to utilize the Suzuki trade name name. There was besides a 30 month moratorium period during which Suzuki promised non to come in the Indian market particularly in the two-wheelers section. The company besides got over a period of labour agitation that required Chairman Venu Srinivasan to take tough steps to raise a company that was in a province of fiscal convulsion. He went on to put in new engineering, nurture in-house design and implement Toyota-style quality plans.

Recent events

Over the old ages TVS Motor has grown to be one of the largest groups, both in footings of size and turnover, with four province of the art fabrication workss in Hosur, Mysore and Nalagarh in India and Karawang in Indonesia. TVS Motor is credited with many inventions in the Indian car industry, noteworthy among them being the debut of India ‘s first roadster moped, the TVS 50cc. The company became the leader in its class of sub 100 milliliter mopeds holding sold 7 million units. It besides introduced the TVS Scooty, which went on to go India ‘s 2nd largest trade name in the scooterette section. The TVS Jive launched in November 2009 went on to go India ‘s first clutch-free minibike which aimed at a stress-free rider experience. While the unisex scooter TVS Wego was targeted at urban twosomes having body-balance engineering for easier handling. On 1 June 2012, TVS Motors reported a dip of 5 % in its entire gross revenues for May 2012.On 10 July 2012, TVS Motors and BMW were reported to be in negotiations for engineering sharing.


TVS Motor won the Deming Application Prize in 2002, given to companies that do outstanding work in the field of Quality Management. It was the first and lone Indian two-wheeler company to win the award. It is considered to be one of the universe ‘s most esteemed quality awards.The same twelvemonth TVS Motor won the National Award for successful commercialisation of autochthonal engineering from the Technology Development Board, Ministry of Science & A ; Technology, Government of India. In 2004, TVS Scooty Pep won the ‘Outstanding Design Excellence Award ‘ from BusinessWorld magazine and the National Institute of Design, Ahmedabad. The effectual execution of Entire Productivity Maintenance patterns won TVS Motor the TPM Excellence Award given by the Japan Institute of Plant Maintenance in 2008.

BMW Group

TheA BMW GroupA is considered to be one of the most successful makers of cars and bikes in the universe with its BMW, MINI and Rolls-Royce trade names. As a planetary company, the BMW Group operates 25 production and assembly installations in 14 different states and has planetary gross revenues web in more than 140 states.

In the fiscal twelvemonth 2010, the BMW Group sold 1.46 million autos and more than 110,000 bikes worldwide. The net income before revenue enhancement for the twelvemonth 2010 was euro 4.8 billion and the grosss amounted to euro 60.5 billion. As of 31st December 2010, the BMW Group had a work force of about 95,500 employees.

The success of the BMW Group has ever been built on long-run vision and responsible action. The company has established ecological and societal sustainability throughout its value concatenation, comprehensive merchandise duty and a clear committedness to conserve resources as an built-in portion of its planetary scheme. As a consequence of these attempts, the BMW Group has been ranked as industry leader in theA Dow Jones Sustainability IndexesA for the past seven old ages.

BMW IndiaA has its central offices in Gurgaon, Haryana and is a 100 % subordinate of the BMW Group. India operations started on 29th March 2007, when BMW India officially opened its production works in Chennai. The Chennai works produces BMW 3 Series and BMW 5 Series Sedans in gasoline and Diesel discrepancies and has an installed capacity to bring forth 3000 units per twelvemonth on a individual displacement footing. BMW ‘s initial investing to put up operations in India was 110 crores.

As of 2009, BMW India straight employed about 200 people with up to 600 extra occupations been created in the trader and service web. Presently, BMW has about 20 traders and service Centres across the state with aggressive programs to get down extra franchises.

BMW India has besides established an International Purchasing Office ( IPO ) at its central offices in Gurgaon. The IPO will concentrate on the possibility of exports from India to the BMW Group International Production Network and work towards increasing the sourcing portion from India over the coming old ages. The activities include the designation and appraisal of possible providers taking into history BMW ‘s demands for quality, engineering and logistics. The IPO will research procurance of production stuff ( constituents ) every bit good as IT and Engineering Services.

Company History

In 1913, Karl Rapp founded the company called “ Rapp-Motorenwerke ” at a mill near Munich. It was a subordinate of a company called “ Flugwerk. ” Rapp set up the company to bring forth aircraft engines, but these engines had assorted jobs, therefore the company went through initial hiccoughs. During the same clip Gustav Otto, construct little aircrafts. Unlike Rapp who was enduring from jobs in constructing engines, Gustav Otto ‘s concern kicked off. Otto ‘s male parent was a really celebrated adult male. He had invented the four-stroke internal burning engine.

In 1916, Gustav and Karl ‘s company merged together to organize the Bayerische Flugzeug Werke or BMW. Rapp ‘s company headed by Franz Popp was transformed into Bayerische Motoren Werke GmbH on March 7, 1916. After the amalgamation with Otto ‘s company, the new company expanded its footprint really quickly. The new company turned to Camillio Castiglioni for support. Castiglioni and Popp subsequently pushed Rapp out of the company.

In 1917, the new company developed its first aircraft engine, the Type IIIa. This engine was developed by Max Friz who was responsible for BMW ‘s merchandise development. The German authorities bought this engine taking to BMW ‘s first major sale.

In 1919, BMW expanded its production to boar engines, truck engines and farming equipment. The company besides worked on aircraft engines in concealment, as it was non allowed to bring forth it. It subsequently produced the Type IV engine.

In 1920, BMW could non sell plenty air trade engines and started fabrication of brake systems, office furniture and work benches.

Company ‘s Founder ( s )

Bayersiche Motoren Werke ( Bavarian Motor Works ) or BMW was formed by three people – Karl Rapp, Franz Popp and Max Friz. In 1913, Karl Rapp set up an aircraft engine store, but the engines made a batch of noise. At the same clip, Gustav Offo setup his store to construct aircrafts, called Rapp Motoren Works. The two companies later merged.

Karl Rapp was born in the twelvemonth 1882. He was a proficient interior decorator with Daimler boulder clay 1912. He was involved in the production of aircraft engine.

Franz Popp was the General Director at BMW AG from 1922 to 1942. He was born and brought up in Vienna. He studied mechanical and proficient technology. He was besides in charge of developing the Mittenwalk railroad. When he was functioning at Pola, he heard about Rapp Motoren Werke. He wanted to do the Austro-Daimler engines at that place and was able to convert the governments for the same. He so convinced Rapp to engage Max Firz, a really qualified applied scientist.

Fabrication Facilities

In 2007, the company opened its production works in Chennai ( Tamil Nadu ) to sell autos entirely to the Indian market. The BMW works in Chennai produces the BMW 3 Series and the BMW 5 Series, both in gasoline and Diesel discrepancies. The works has the capacity to bring forth 3000 units per twelvemonth. The German luxury auto shaper rolled out its 5-Series autos from Chennai at an ex-showroom monetary value ticket runing between Rs.39.8 hundred thousand and Rs. 58 hundred thousand. The autos were produced both in gasoline and Diesel discrepancies. While the 523i, 530d and 525d were produced as Wholly Knocked Down ( CKD ) units in Chennai, the 535i was imported as a Completely Built Unit ( CBU ) . The production installation in Chennai is BMW ‘s 5th mill in Asia and is a portion of the company ‘s end of selling 1, 50,000 autos in Asia in 2007.A The company made an investing of 20 million Euros to open this works.

The production works in Chennai, when it started in 2007 had a entire work force of 200 people. The works besides manufactures the seats and doors of the auto but the remainder of the parts are imported.


BMW has autos that semen in both gasoline and Diesel engines. Harmonizing to the company, the gasoline engine has a High Precision Injection system that reduces fuel ingestion and is portion of BMW ‘s Efficient Dynamics system that aims to convey fuel efficiency to all BMW autos.

This High Precision Injection engineering has the piezo injector which is positioned between the valves and the flicker stopper. This engineering consists of a figure of piezo crystals which expand when they come in contact with electricity. Bettering auto public presentation, the enlargement causes the fuel-air mixture into the burning chamber at 200 bars. The force per unit area causes really small fuel to be used, thereby doing this engineering an of import characteristic of all BMW autos.

Since the piezo injections require merely 0.14 msecs, many injections can be inserted in one rhythm. There is an electronic system that adjusts the timing and dosage of fuel injected into the system. This leads to a decrease in fuel ingestion and increase in fuel efficiency. BMW is be aftering to utilize this same engineering in its motorcycles.

BMW India has received the top automotive excellence awards in India. The new BMW 5 Series is a clear victor from the BMW stable. It has significantly contributed to the success and image of BMW in India. This 6th coevals car has all the properties of the ultimate luxury saloon. These awards are a testimony to the superior technology, aesthetics and kineticss of the new BMW 5 Series.

International Operationss

The BMW Company is an highly successful maker of cars and bikes globally and has Rolls-Royce, MINI and BMW trade names. The company operates 24 production installations in 13 states and has a entire franchise web in 140 states.

The company has achieved a planetary gross revenues volume of 1.29 million cars and 87,000 motorcycles for the 2009 twelvemonth. As of 2009, the company employed a entire work force of about 96,000 employees.

In Asia, BMW sold 16,959 Minis in 2007, a 3.7 per cent addition from the old twelvemonth and had gross revenues of 142 Rolls-Royce Phantom vehicles.

Graz, Austria is the part which produces the BMW X3 ( E83 ) . 45,973 X3s were produced in 2009. The Spartanburg works in South Carolina, USA is the hub for production of the BMW XR ( F25 ) . The production figures as per the state in 2008 are as follows:

Germany – 9,01, 898 autos

Mexico – 1,00,000 autos

Russia – 2,000 autos

United Kingdom – 2,36,436 autos

Austria – 83,863 autos

USA – 1,70,741 autos

South Africa – 47,980 autos


BMW does non export any autos from India, harmonizing to the company.

Future Plans

In India, BMW plans to open a franchise in Ludhiana in coaction with Krishna Automobiles. Harmonizing to the President of BMW India, Dr. Andreas Schaaf, the BMW franchise is expected to use 30 people. There will besides be a squad of service applied scientists at this installation who would hold received their preparation in Singapore, Malaysia and Germany.

BMW motorcycles launched in India

BMW India eventually launched their much awaited liter category motorcycles in India. This was coming after months of guess as to when the BMW motorcycles would be launched in India. These motorcycles nevertheless do n’t acquire a separate show room and would hold to portion infinite with the BMW autos. The other common factor would be the fact that the commercial motorcycle units ( CBUs ) will be brought in straight from Germany, these motorcycles would be about the same as their 4 wheeled cousins. There would be a sum of 10 BMW motorcycles on offer for sale in India as of now. All these motorcycles would be imported as per the order that the client topographic points and bringings would take about a hebdomad to anyplace from 3-4 months.

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The cheapest of the BMW motorcycles would be the R 1200 R bare street bike whereas the costliest would be the HP 2 Sport full faired athletics motorcycle. The former would be available for an asking monetary value of Rs 16, 06,419 whereas the latter goes for a monetary value ticket of Rs 29, 35,187. All other motorcycles would slot in neatly between these two. Those would be the K 1600 GTL, R 1200 RT, K 1300 S athleticss tourist, K 1600 GT, S 1000 RR, K 1300 R naked musculus motorcycle, R 1200 GS Adv and the R 1200 GS.

Industry Analysis

Indian bike market presently has two major sections one is executive motorcycles which are fuel efficient and can be used for twenty-four hours to twenty-four hours transit and frequently positioned as consumer merchandises and household motorcycles. Other one is premium motorcycles which are rated on public presentation properties. Executive section motorcycles have lower operating costs. Premium section motorcycles must hold ocular entreaty, high velocities, great acceleration and superior drive experience, managing and braking. But today companies are seeking to offer premium motorcycles ( more than 125cc ) to executive category besides as these motorcycles are non so dearly-won and provides an first-class drive experience. As a consequence there is a displacement from executive category towards premium category. This is apparent from Bajaj Auto ‘s debut of the Pulsar 135cc targeted at the conventional commuter section draw a bead oning to see athleticss bicycling. Likewise, the Discover 150cc is positioned as a household motorcycle for the commuter section wishing to sit a higher supplanting motorcycle.

India ‘s per capita existent GDP growing of 7 % ( CAGR ) over the last six old ages has contributed well towards raising the criterion of life of families, which in bend has been one of the cardinal drivers of growing for the state ‘s car industry. A big teenage and grownup population potentially offers a big market for minibikes. India presently enjoys a favourable demographics with mean age of 25 old ages, which is 9 old ages younger than China, and more than 12 old ages and 19 old ages younger than the US and Japan severally. As per ICRA ‘s estimations ( based on Census 2001 and Census 2011 information ) , about 33 % of India ‘s population of 1.2 billion ( in 2011 ) belongs to the age bracket of 20-40 old ages. This constitutes the population of males, which is the major mark section for bikes and is estimated to be 206 million. The population of females, which is the cardinal mark section for scooters is estimated to be 189 million and provides a batch of chances in the car market.

Beginning: ICRA

In Indian two Wheeler markets there are different giants like Bajaj, Hero, Honda, TVS, MahindraA KTM, Ducati, Harley-Davidson, Triumph and MV Augusta. Other companies who besides enjoy a minor portion in this sector are LML, Yamaha etc. Hero Moto corp. antecedently Hero Honda is supposed to be the market leader followed by Bajaj. But in today ‘s universe it is fighting as a market rival. Indian market is majorly contributed by the in-between category people with their lifting per capita income and increasing involvement in high terminal motorcycles is a good chance for TVS-BMW.

Previously TVS besides had links with Suzuki but late after twelvemonth 2001 they broke the partnership. Recent times have been tough – though its two-wheeled gross revenues rose 7 per cent in 2011-12 to 1.89million units ( sold 14,172 three Wheelers every bit good ) , TVS lost the 3rd place in the section to Honda ( 1.99 million units ) in the twelvemonth. The company ‘s old partnership with Suzuki had lasted 19 old ages till 2001, under which it released a scope of bikes, including the Suzuki Samurai, Suzuki Shogun and Suzuki Fiero theoretical account. Now it is entirely in the market and is looking for a engineering spouse. The coaction with BMW will increase TVS ‘s trade name value in the targeted market section i.e. high terminal market. By this coaction at that place will merely be a engineering transportation and BMW will merely utilize works and channels of TVS to provide their motorcycles. Therefore, cost to come in in coaction is less but other participants like LML, Mahindra, etc can besides be after to come in this market. Percept of purchaser in instance of high terminal motorcycles depends on company ‘s trade name value and driving experience. TVS is still non really popular in this section because TVS has ever produced low priced merchandises compared to its rivals Bajaj and Hero Honda. Although coaction with BMW may raise up its image in heads of people but holding Hero, BAJAJ, Yamaha, Harley Davidson already in the high terminal market it seems to be really hard for TVS-BMW to pull market portion.

A brief expression of market scenario

Table: 2W OEMs Operating in India Year 2000

Year 2011


Bajaj Auto

Bajaj Auto

Bajaj Auto exited the scooters section in 2010

Hero Honda

Hero Honda

Hero Honda entered the domestic scooters section in 2006 ; ended its JV with Honda in 2010

TVS – Suzuki

TVS Motor

TVS and Suzuki parted ways in 2001 ; both have a presence in the domestic 2W industry now as separate companies

Royal Enfield

Royal Enfield

Remains a niche participant fabricating patrol car motorcycles

Bodyguards Yamaha

India Yamaha Motor

Partnership between Bodyguards and Yamaha ended in 2001 with the latter purchasing out the former ‘s full interest in the erstwhile JV



LML was referred to the BIFR in 2006 and is still under its horizon ; the company presently produces scooters although volumes remain little

Honda Motorcycles & A ; Water scooters

Honda, through its wholly-owned subordinate in India, entered the scooters section in 2001 and the bikes section in 2004

Suzuki Motorcycle

After holding exited the Indian market in 2001 on surcease of the JV with TVS, Suzuki entered the domestic bikes section in 2006 and the scooters section in 2007

Kinetic Motor

Mahindra Two Sir mortimer wheelers

Mahindra entered the domestic 2W market in 2009 after purchasing out the assets of Kinetic Motor ( 80 % interest )

Kinetic Engineering

– out of market

Majestic Auto

– out of market

Maharashtra Scooters out of market

Harley Davidson, Hyosung, Ducati Recent entry in Indian market

Beginning: ICRA

The coaction which is done would assist both the company. BMW is a leader in bring forthing ultimate machines. It has a successful scope of high terminal motorcycles. In India, TVS Motors has been bring forthing motorcycles at lowest cost due to their strong R & A ; D. BMW bikes up till now are imported in India and are really dearly-won. Although, there is lifting demand from yuppies ( immature urban professional ) station import responsibilities these motorcycles become so dearly-won that even in niche section of high terminal market merely few people can afford it. Therefore, BMW can utilize assembly line and supply concatenation of TVS motors which has expertness to bring forth at lowest cost. Through this BMW can stretch their market section by supplying motorcycles at a relatively low cost. This may increase the trade name value of TVS Motors but there is a possibility that BMW may lose its trade name value by offering low priced merchandises.

TVS Motors holds strong trade name equity in the Indian market for holding an first-class R & A ; D and broad assortment of merchandises in its section. In fact TVS Scooty has gained an first-class response from public particularly from the females irrespective of age. Its supply channel is perfect in keeping long term relationship with providers and traders. Having a good figure of service Stationss, it has near to 40000 employees working in it. They have reached out to lower category and in-between category subdivisions of the population but upper category is still untapped. So by this tie-up TVS can aim the upper category besides. TVS-BMW has to convey down the cost because on one manus lifting fuel costs are impacting the market of high terminal motorcycle since they are really weak in milage. So at that place needs to be a displacement towards fuel efficient motorcycles and four Wheelers. On the other manus the large giants like Harley Davidson, Ducati and Bajaj-KTM are already in the market to give TVS-BMW a tough clip.

Collaboration in car Industry in India ( Joint ventures )

Here are some of the Joint ventures which have been rather popular in India: –

1 ) Ashok Leyland-Nissan

Ashok Leyland entered into joint Venture with Nissan to go a competitory force in the car industry in 2007.The purpose was to come in into medium and premium section of the Indian car industry and to vie with other car makers present in the Indian market. For this, they are come ining into Indian market with 2 autos which are traveling to be priced in medium and in premium degree.

1 ) Nissan Micra-This was one of the first merchandises of Joint ventures between the two companies. The auto was offered in both gasoline and Diesel discrepancies and is offered at a monetary value of 4-6 hundred thousand.

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2 ) Evalia-The joint venture of Nissan and Ashok Leyland will convey out their first merchandise in 2012 named Evalia. This will be a premium section auto and will be taking to vie with Toyota Innova.

2 ) Fiat India Automobiles-

Fiat Automobiles is a Joint venture between Fiat group cars and Tata motors of India. The Joint venture is of 50:50 between the two companies. The Joint venture was incorporated in 1997.The Joint venture produces chiefly 3 discrepancies of autos which are aiming little auto and premium auto section.

1 ) Fiat Linea-Fait Linea is chiefly a little household auto and it comes in 4 different assortments in India.

File: Fiat Linea3.jpg File: ” 12 – ITALY- Fiat Punto 2012.JPG

2 ) Fiat Punto-Fiat Punto is a little auto aiming in-between category people of India.

3 ) General Motors – Hindustan Motors-

General motors and Hindustan Motors entered into a joint venture to bring forth Opel Astra autos for medium and premium section consumers of India. The Joint venture happened in 1994.

4 ) Mahindra-Renault limited-

It is a joint venture between Mahindra of India and Renault of France ( 51 % and 49 % ) .The joint venture was formed in 2007 and they set up a works in Nasik, Maharashtra. The JV produced merely 1 car in India named Mahindra-Logan.

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5 ) General Motors India Private limited

General Motors India Private LimitedA is a 50:50 partnership betweenA General MotorsA andA SAICA that is engaged in the car concern in India. It is the fifth largest car fabricating company in India afterA Maruti Suzuki, A Hyundai, A Tata MotorsA andA Mahindra. General Motors India started its journey in 1996 in India and has completed 16 old ages of operation in India.

The Joint venture produces the Chevrolet trade name in India.

These include the Chevrolet, Tavera, Optra etc.


Collaboration in the Two Wheeler Section

1 ) Hero Honda Motors

Hero Honda was started in 1984 as a joint venture between Hero motors and Honda motors, a Nipponese company. The company is chiefly based in New Delhi, India. The company is one of the largest makers of cars, motorcycles and scooters. Hero is the flagship name used by the Munjal brothers for their company Hero cycles.The 2006 Forbes list has ranked Hero Motors with a rank of 180.In 2010, Honda Motors moved out of the Joint Venture and therefore Hero Honda was renamed to Hero Motocorp on 4th June 2012.

Munjal Brothers and Honda Motor corp have 26 % interest in the company. The company used to chiefly acquire engineering from their Nipponese opposite number, so there were concerns that after the disintegration of the JV, the sustainability of company would go a concern, but Hero was able to manage the job easily.The company has 3 fabrication installations in Daruhera, Uttrakhand and Gurgaon.

Company Products in Automobile Industry

Hero manufactures a assortment of merchandises which chiefly include: –

1. Hero sleet

2. Hero sleek

3. Ambition

4. CBZ extreme, CBZ, CBZ star

5. Hunk

6. Cadmium 100, Cadmium 100s

7. Karizma, Karizma R, Karizma ZBR

8. Passion and Splendour.

File: Karizma R 1478.jpg File: Hero Honda Passion.jpg

TVS -Suzuki JV

T.V. Sundaram started the TVS Group with a little conveyance concern in Chennai in 1911. Over the old ages, the group diversified into two-wheelers, automotive constituents, automotive spares, computing machine peripherals and fiscal services.

However, the group was peculiarly successful in its automotive constituent and two-wheeler concerns. By 2001, with around 25 companies in its crease, TVS emerged as one of India ‘s prima two-wheeler makers. Sundaram Clayton was the flagship company of the group and owned a commanding interest in TVS. Suzuki ‘s history dates back to 1903, when Michio Suzuki founded Suzuki Loom Works in Hamamatsu in Shizuoka, Japan. For the first 30 old ages, the company focused on the development and production of complex machines for Japan ‘s silk industry. In 1937, the company diversified into fabrication autos for the Nipponese market. It stopped the production of autos and concentrated on the industry of the looms during the Second World War.

By 1954, the company was bring forthing about 6,000 autos per month and in the same twelvemonth its name was changed to Suzuki Motor Co. Ltd. By March 2001, Suzuki ‘s cyberspace gross revenues were A? 1,600 trillion and it was one of the top 5 car makers of the universe. The company had 57 production Centres spread over 26 states all over the universe and its vehicles were sold through 134 distributers in 175 states. Suzuki entered India through the TVS Suzuki joint venture, originally incorporated as Indian Motorcycles Pvt. Ltd in 1982.The company came out with a public issue in 1984 and was named as TVS Suzuki. In the same twelvemonth, the company launched its first 100-cc bike, Ind Suzuki, which was good received by the market.

Bajaj Auto Collaboration with Austrian maker KTM

Bajaj has been working with Austrian maker KTM for 5 old ages. The company holds a 39 % interest in Austrian Company. Bajaj program to establish 2 classs of Bike with this motorcycle

1 ) Bajaj Duke

Bajaj Duke is 200 milliliter theoretical account which was late launched in India at a monetary value ticket of 1.17 hundred thousand.

2 ) Bajaj Sport version ( 375cc )

A KTM and Bajaj are developing a 375 CC Motorcycle which will be launched in India in approaching old ages. The 375 CC Motorcycle may be launched in India as a more powerful Duke, there is besides a possibility of Pulsar series utilizing the same high supplanting powerful engine. In past as good, there have been negotiations of Duke 350 and Pulsar 350 doing it to India in coming old ages by both official and unofficial beginnings, which might be the motivation behind these high capacity engines.

KTM and Bajaj Developing 375 CC Motorcycle hypertext transfer protocol: //

Why is TVS concentrating on the Premium Segment?

Entry section of bikes is shriveling in size as OEMs pursue profitable growing through other 2W sections.Motorcycle theoretical accounts with a spine monetary value of up to Rs. 40,000 constitute the entry section. This section mostly consists of 100cc motorcycles and is presently composed of the CD Dawn and CD Deluxe theoretical accounts of HHML, Platina of BAL, Star Sport of TVS and Crux and Alba of Yamaha. The Entry section has faced continual volume force per unit areas in the domestic market over the last several old ages and was besides the worst hit during the recognition squeezing in H2, 2007-08 and the economic lag of 2008-09. Although gross revenues volumes in this section have remained level over 2009-10 and 2010-11, the section ‘s portion in the domestic 2W market has steadily declined from 43 % in 2005-06 to 16 % in 2010-11. Several factors have contributed to the declining importance of the entry section in the Indian 2W market. These include the gradual displacement in penchant of consumers in favor of the more feature-rich Executive section, reluctance of organized moneymans to increase recognition exposure on this and the OEMs ‘ ain scheme of cut downing focal point on this comparatively less profitable section.

The shriveling volumes in this section have led to discontinuance of several taking trade names of the yesteryear. For case, Bajaj Auto ‘s CT100 was timing monthly volumes of 80-85,000 in 2005-06, but was finally discontinued and replaced with the Platina whose current production volumes hover around 30-35,000 per month. Bing a section which offers limited range for margin enlargement and remains a extremely interest-rate sensitive section, about none of the 2W OEMs have any programs for new theoretical account debuts into this section. Nevertheless, the Entry section motorcycles have a strong exports possible particularly to other developing markets. Even now, a big bulk of bike exports from India are in the entry section. For case, Bajaj Auto chiefly sells its entry section motorcycle Boxer in Africa, a continent which accounts for around 50 % of the company ‘s exports. Yamaha excessively is sing export of its mass market motorcycle Crux to Africa and South America. Unless any riotous inventions materialize ( like the Tata Nano in the rider vehicle section ) ensuing in significantly lower monetary value points, ICRA expects the Entry section volumes to turn at a much slower gait than the overall 2W industry and volume growing to be driven chiefly by exports.

Executive section remains the largest volume generator for the 2W industry: –

Motorcycle theoretical accounts with a monetary value between Rs. 40,000-50,000 comprise the Executive section, which is mostly concentrated around the 100-125 milliliter theoretical accounts. The section has benefited the most due to up-trading from the Entry section consequent to the turning edification of clients, besides the steady and unafraid replacing demand. Consequently, the section ‘s portion in the domestic bikes section has risen from 48 % in 2005-06 to 65 % in 2010-11. Bing the largest volume generator, the Executive section has besides seen the largest figure of new theoretical account launches and portfolio renovations by all participants and involves the highest merchandise and trade name jumble.

Although the Executive section has high competitory strength reflected in the presence of a big figure of trade names, Hero Honda remains the clear market leader on the strength of its Splendor and Passion series of motorcycles that have maintained a dominant place over the old ages. In fact, in 2008-09, Hero Honda ‘s market portion in this section had touched the highs of 80 % , due to subdued competition in that period following lowering of Bajaj Auto ‘s focal point on the 100cc section and the absence of modern-day merchandises in TVS ‘ portfolio. Since so, both Bajaj Auto and TVS have introduced new merchandises – Bajaj Auto launched the Discover 100 in July 2009 ; and TVS launched the Jive ( 110cc motorcycle ) in December 2009. Bajaj Auto ‘s Discover 100 has been a runaway success since its launch and has captured a market portion of around 22 % in less than two old ages of its launch ( presently timing monthly volumes of 1lakh units ) , doing Hero Honda ‘s market portion in this section to return to historical degrees of around ~65 % .

TVS Jive ‘s monthly run-rate, on the other manus, has remained low so far at ~4,000 units, even as it is unambiguously positioned as the lone auto-clutch motorcycle in the state. While there are trade names from several other participants excessively that have a presence in this section, none have been able to present any serious competition to Hero Honda so far. Yet, the strong growing chance provided by this section due to its big size has drawn regular new merchandise debuts from all participants including Honda Motorcycles & A ; Scooters ( 3rd largest participant in the Executive section after Hero Honda and Bajaj Auto ) , Yamaha, Suzuki and Mahindra, significantly spread outing the section ‘s pie. Traveling frontward, ICRA expects competition in the Executive section to escalate farther as Honda Motorcycles & A ; Scooters and Suzuki have announced programs to present new merchandises in this section. Concurrently, the renovation rate of bing trade names is besides likely to derive farther gait. However, sing the healthy growing chances of the section, it is less likely for competition to be based on monetary value and below-the-line publicities. But the section is expected to deduce a greater portion of marketing spends as investing in constructing trade names could hold positive long term benefits for gaining/ protecting market portion in this big volume section.

Premium section expected to go on being the fastest growth in the bikes market

Motorcycle theoretical accounts with a monetary value of over Rs. 50,000 comprise the Premium section, which consists mostly of greater than 150 two hundred engine capacity motorcycles. This class is the most metameric and includes:

( a ) Performance motorcycles, runing from 150cc to 220 milliliter and consisting of Hero Honda ‘s Glamour, Achiever, CBZ Extreme, Hunk and Karizma ; Bajaj Auto ‘s Pulsar household, Honda Motorcycles & A ; Scooters ‘ Unicorn Dazzler, and TVS ‘ Apache RTR, besides theoretical accounts from the stallss of Suzuki and Yamaha

( B ) Cruiser motorcycles such as Royal Enfield ‘s Bullet and Bajaj Auto ‘s Avenger

( degree Celsius ) Ultra bicycling scope consisting of Bajaj Auto ‘s Kawasaki Ninja, Honda Motorcycles & A ; Scooters ‘ CB 1000R, Suzuki ‘s Hayabusa and Yamaha ‘s YZF-R1.

The Premium section has been the fastest turning one over the last five old ages holding recorded a volume CAGR of 27 % , a period in which its section portion increased to 17 % in 2010-11 from 9 % in 2005-06. Bajaj Auto ‘s Pulsar household comprising of 135cc, 150cc, 180cc and 220cc motorcycles occupy the frontal place in this section with a market portion of ~50 % ( monthly volumes of 70,000-75,000 units ) , followed by Hero Honda with a market portion of ~20 % . The balance 30 % is about equally distributed between Honda Motorcycles & A ; Scooters, Suzuki and Yamaha.

Unlike Executive section bikes, which are positioned as commuter merchandises and household motorcycles supplying basic transit, the placement of the Premium section motorcycles is anchored on public presentation properties. While Executive section motorcycles typify higher fuel economic system and lower operating costs, the characteristics of Premium section motorcycles are characterized by ocular entreaty, higher velocities, judicious acceleration and superior drive, managing and braking. At the border, nevertheless, such clear differentiation in footings of mark clients has now blurred. This is apparent from Bajaj Auto ‘s debut of the Pulsar 135cc, targeted at the conventional commuter section draw a bead oning to see athleticss bicycling. Likewise, the Discover 150cc is positioned as a household motorcycle for the commuter section wishing to sit a higher supplanting motorcycle.

In ICRA ‘s position, the market for this section offers further range for cleavage in footings of monetary value points and public presentation features. Besides, the section is expected to acquire crowded as new participants like Harley Davidson, Ducati and Hyosung gear up to spread out their presence in the super-premium section. At the same clip, Bajaj Auto, Suzuki, Honda Motorcycles & A ; Scooters and Mahindra besides have multiple merchandises in the grapevine slated for launch in the close term. Some of the new merchandises planned to be launched are either likely to be imported as wholly built units ( CBUs ) or would transport a high imported content ensuing in higher monetary values which could curtail volumes. Although these merchandises are non meant for the mass market, sing the addition in client consciousness degrees, the OEMs can non afford to disregard the price-value equation. Overall, this section is expected to stay the fastest growth over the average term, given the disproportional growing in buying power in the custodies of middle-class urbanites, particularly in the age group of 20-30 old ages. This should besides interpret into superior net income borders for participants that are stronger in the Premium section.

TVS Motor-BMW trade: Who is likely to derive what?

TVS Motor has entered into an understanding with BMWs minibike division that is BMW Motorrad. This understanding would be for engineering sharing. As of now the company has said that there is no equity sell involved. It may merely start-off with a engineering affiliation and so may widen to joint selling. TVS motor rose up 6 % as studies suggested the company was in negotiations with BMW to beginning engineering to develop high-end bikes.

Many analysts compared this with Bajaj Auto ‘s affiliation that it has with the Austrian motorcycle shaper KTM, but in that tie-up Bajaj really owned a 47 % interest. So it ‘s of import to see what sort of coaction TVS and BMW will hold. In 2012, it will be 11 old ages since TVS split with its Nipponese spouse Suzuki and is now looking for a new coaction.

However, direction has refused to unwrap inside informations on whether any contract fabrication is involved or if there will be any joint merchandise development or even if TVS will establish high-end motorcycles in the premium section. Overall TVS ‘ market portion has been stealing a whole batch. It ‘s lost its 3rd slot to Honda Motors and is sitting on a entire market portion of merely 14 % . Its minibike market portion is merely a mere 5-6 % . What ‘s in it for BMW? Beginnings indicate that BMW may acquire a strong local spouse. TVS may assist it spread out its web quickly and may derive market cognition, cut fabrication costs etc Many of the analysts believe that if this coaction comes through it may non be a game modifier for TVS, because BMW provides engineering for high-end motorcycles that is much higher than 200cc and the market over here is non really broad.

TVS presently has the Apache which is 160cc every bit good as 180cc and that is non selling a whole batch. So it waits to be seen what TVS will make with regard to this coaction.

However, TVS on its portion has been rather aggressive. Meanwhile, it is confident to retrieve the market portion with new merchandise launches. It is be aftering to put about Rs 300-400 crore on merchandise development and review their full scope. It is besides working on two ground-up engine and merchandise platforms and they are aiming a rollout of six new merchandises including bigger motorcycles in the 200-250cc class.

TVS Motor Company said that it expects gross revenues to turn by up to 8 per cent this financial. “ Our gross revenues will turn about equal to the industry growing. We expect the gross revenues to turn by 7-8 per cent, ” TVS Motor Company President and CEO, K N Radhakrishnan told PTI on the out of boundss of the SIAM one-year convention. The company had gross revenues of 2.1 million units during the last financial, he added.

TVS Motor has been registering diminution in gross revenues in the past few months. Its entire gross revenues in August this twelvemonth stood 154,647 units against 194,898 units in the same month last twelvemonth.

The company expressed hope that gross revenues will pick up in the approaching gay season. Similarly, investors are inquiring if the new joint venture will be a success. Will it be a runaway success? That ‘s a million dollar inquiry.

Possible impacts of TVS and BMW coaction:

From TVS point of position:

TVS Motors is a well-established car company in India, which has its strong presence in scooter section through its TVS Scooty minibike and similar merchandises. It had besides made a strong presence in motor motorcycle section through TVS Star, TVS Appache, etc. The ongoing coaction if successfully done will assist TVS to better its engineering, i.e. enable design and industry of two-wheelers specifically for the Indian market in more technically strong manner that will assist. This coaction will besides assist them to do a strong presence in the high terminal minibikes markets, as TVS has a better range while BMW got trade name acknowledgments, better public presentation and manner facet with it. In yesteryear besides, TVS had coaction with Suzuki which helped them foster their engineering and efficiency. The 19 twelvemonth relationship with Suzuki was aimed as a engineering transportation to enable design and industry of two-wheelers specifically for the Indian market.

From BMW point of position:

BMW has a strong presence in India market in its auto section, but its high terminal motorcycles are non so much explored. At present BMW usage to import all its production from Germany where it ‘s fabrication works is established to the Indian market on the footing of client particular order which takes 2-3 hebdomads to flush up to 3 months period for concluding bringing to the client. Besides, this procedure includes tonss of import and export duties which at terminal rise the overall cost of the motorcycles. Therefore, if the coaction between the two giants took topographic point so it will assist the BMW to get down its ain fabrication works in India. Besides, TVS bing range and huge experience in the Indian market will assist BMW to set up its pes in the Indian market. It will besides assist BMW to salvage tonss of money as get downing a new concern from abrasion will be a batch and besides devour considerable clip. The lone concern of the BMW is how to keep its trade name equity, and consumer involvement.

German motorcycle makerA BMWA acknowledges the mantra to make the volume concern and still remain relevant with its high terminal motorcycles and that is to hold a presence in India, China, Indonesia, Vietnam and Thailand. Trouble is it has no motorcycles less than 650cc of engine supplanting and its scooters are manner excessively trick and technologically adept to be sold at monetary values prevalent in Asia. The obvious thing so is to put up an Asiatic base, sooner with a well-established motorcycle shaper in the part to do a batch of little capacity machines runing from 125cc to 250cc straddling assorted sections of the two-wheeler market, and through this coaction this seems to be go oning for the BMW.

Exhibits: –

Exhibit 1: – Strong Research and Development.

Exhibit 2: – Market Presence

Exhibit 3: – Distribution Network.

Exhibit 4: – Merchandise Scope