In April of 2013, India's TVS Motor Company and Germany's BMW Motorrad entered a long-term agreement to produce motorcycles under 500cc for global markets.
Following a series of significant collaborative disappointments—such as Mahindra-Renault (2007-10), Volkswagen-Tata (2017), and Ford-Mahindra (2019)—the recent triumphs of Toyota-Suzuki in the automotive sector and TVS-BMW Motorrad in the motorcycle industry demonstrate that co-branding could be the prospective path for establishing partnerships.
According to analysts, the earlier partnerships might have faltered due to their attempt to create an entirely new joint product. In contrast, the strategy employed by Toyota-Suzuki and TVS-BMW Motorrad, which involves co-branding existing products, provides customers with models they are already familiar with.
The remarkable achievement of TVS-BMW Motorrad is evident as it celebrates a decade of collaboration, having successfully marketed 140,000 motorcycles worldwide. According to automotive analysts, this partnership appears to hold promising prospects for many more years to come.
Back in April 2013, India's TVS Motor Company and Germany's BMW Motorrad inked a long-term agreement aimed at producing motorcycles below 500cc for the global market. This joint effort has led to the creation of four distinct products utilizing the 310cc engine platform. Manufactured at the TVS facility in Hosur, Tamil Nadu, these products encompass the TVS Apache RR 310 (launched in December 2017), followed by the BMW G 310 R and BMW G 310 GS (released in July 2018), and most recently, the BMW G 310 RR (unveiled in July 2022).
Collectively, these four models have achieved an impressive sales figure of 140,000 units across diverse markets, including India, the EU, the US, Latin America, Japan, and China. Notably, within this scope, BMW Motorrad has managed to sell more than 21,000 motorcycles in India while also exporting over 50,000 motorcycles.
The collaboration between both firms is presently undergoing expansion, encompassing the joint development of novel platforms and prospective technologies, including those related to electric vehicles.
KN Radhakrishnan, the Director & CEO of TVS Motor Company, highlighted that the partnership stands as a testament to the shared principles of innovation, quality, customer satisfaction, engineering excellence, and a commitment to delivering products with global appeal, common to both BMW and TVS. Radhakrishnan also pointed out that the quartet of motorcycles has reached over 100 countries. As the partnership extends to encompass upcoming technologies and sustainable mobility solutions, there are ongoing discussions about broadening the manufacturing network beyond India to accommodate future growth. This move includes addressing the recently unveiled BMW CE 02—an electric two-wheeler boasting two separate 2 kWh lithium-ion battery packs and a claimed range of 90 km.
According to Som Kapoor, EY India Automotive's Future of Mobility leader and partner in consulting, BMW and TVS naturally complement each other. Kapoor explained that TVS facilitated BMW's access to the 310cc platform, a feat that might have proven challenging for BMW to accomplish within Europe. This collaboration allowed BMW to harness the engineering expertise in India, resulting in a motorcycle tailored not only for the Indian market but also for the global stage, where demand for midsize motorcycles is on the rise. Kapoor added that from the partnership, TVS gained the advantage of BMW's worldwide brand recognition, while BMW benefited from TVS's cost-effective engineering solutions.
According to Saket Mehra, a partner at Grant Thornton, the automotive sector is undergoing a significant transformation on a global scale. This transformation is driven by an increasing emphasis on electrification and alternative fuel technologies, the reconfiguration of global supply chains, fluctuations in raw material procurement, and heightened volume growth resulting from higher disposable incomes. Given these evolving dynamics, the establishment of appropriate partnerships and collaborations becomes crucial, as he noted.
Exploring why the partnership between TVS and BMW has been highly successful, he emphasized the critical role played by the strategic alignment between the two entities. He stated that successful partnerships necessitate a robust congruence in terms of partnership objectives, structure, defined roles, and a clear understanding of cost and strategic advantages. He also pointed out that some partnerships have faltered due to changes in business or regulatory landscapes. Therefore, it becomes imperative for such collaborations to possess adaptability, address potential business and industry risks promptly, and exhibit agility. Mehra highlighted that a partnership should be geared towards strategic enhancement of competitiveness by capitalizing on strengths, sharing insights, and maintaining a fair sense of competition.
Another industry expert commented that technology is exerting a significant influence on shaping joint ventures within the automotive sector. The emergence of novel technologies like electrification, autonomous driving, and connected vehicles is opening up fresh avenues for collaboration among automobile manufacturers. Anticipations are that more such collaborations will arise, aimed at integrating these new technologies into the product lineup and aligning with emerging market trends.
The effectiveness of this partnership becomes evident when considering that the TVS Hosur manufacturing facility currently contributes approximately 10% to the global production volume of BMW Motorrad. Reports suggest that there are prospects for further expansion, including the potential development of a new body type (such as a cruiser motorcycle) utilizing the 310cc platform in the near future.
Regarding the collaboration between Toyota and Suzuki, their joint efforts have resulted in the sale of over 250,000 vehicles. This partnership was established in Tokyo in 2018, and the inaugural vehicle hit the market in 2019. Most recently, Toyota India introduced the midsize MPV Rumion, which is essentially a rebadged version of the Maruti Suzuki Ertiga. This marks the fifth model exchange between Toyota and Suzuki within a span of four years. Among the other models that have been part of this exchange are Baleno-Glanza, Vitara Brezza-Urban Cruiser, Grand Vitara-Urban Cruiser Hyryder, and Invicto-Innova Hycross.
