“Let’s be clear. This is not going to be a rich man’s product. As the product is below the 500-cc segment, it will be a premium product of course. And prices naturally go up as you go past the 250-cc segment, but not further than that,” said Venu Srinivasan, Chairman, TVS Motor Company, in an interview with The Hindu.
Pointing out that the tie-up was a strategic fit, Mr. Srinivasan said that TVS Motor wanted a situation where there would be ‘no conflict of interest’.
“If we had tied up with anyone else for this type of an arrangement, it could have possibly caused competition. BMW clearly engages in a premium-type of play, while our core competency is in mass manufacturing. Therefore, a win-win situation here is possible, which is vital for us,” he said.
He, however, refused to comment on whether this would be a prelude to any future equity participation.
“If you look at the policy statement behind this partnership, there is no financial intention at all at this point.
“The intention is just to benefit both parties here,” Mr. Srinivasan said.
Talking about the mutual benefits of the partnership, Mr. Srinivasan pointed out that both players brought equal participation to the table.
“What I see from this is a sort of rub-off effect for us in the marketplace. BMW has chosen us as a partner. They get products at a competitive cost, and we get the ability to learn about high-quality technology and engineering.”
According to Stephan Schaller, President, BMW Motorrad, the decision to go with TVS Motor as a partner was mainly due to its track-record and mass manufacturing simplicity skills.
“When we were scouting, we screened many possible partners. TVS clearly works for us as it is a perfect fit in our foray into the sub-500 cc segment. We hope to learn as much from them as they do from us,” Mr. Schaller said.