April 2013 is a month to remember!
BMW Motorrad announced to partner up with TVS, an Indian motorcycle manufacturer, to jointly produce motorbikes with an engine capacity below 500CC. If you’re a BMW rider you might think “WTF?! Who wants to ride a sub 500CC bike? Isn’t that a toy for children?”
If that thought crossed your mind you surely live in a Western country (North America, Europe, Australia) where motorcycling is primarily a leisure activity. But here in Asia things are a bit different.
Two wheelers remain the first choice as a means of transport for many. That’s due to costs, efficiency and reliability. Imagine India or Vietnam without motorcycles – impossible!
If BMW Motorrad wants to grow in the new emerging markets, the company need to supply attractive models. And that means affordable, efficient, small bikes. Bikes below 500CC and a price tag below USD 5000.
Who will buy those bikes? Mainly young guys in their 20s I reckon. Especially in India and Vietnam, where BMW is considered as an expensive luxury brand, the Bavarians will surely run in open doors. I wouldn’t be surprised if, two years from now when the first models are available, those bikes are sold out within a few days. And once someone is locked in with a brand, they normally stick with it. The twenty-something who’s going to buy a small BMW motorbike might later switch to a 1200GS and a 7 series.
The strategy BMW Motorrad is pursuing has already been proven successful. KTM, the Austrian bike manufacturer, teamed up with Bajaj Motor to produce the KTM Duke 200 and KTM Duke 125. The deal is similar to the BMW-TVS agreement. KTM (and BMW) will supply the know-how, Bajaj (and TVS) will do the manufacturing (under KTMs/BMWs supervision).
However, in contrast to the KTM/Bajaj deal in which Bajaj took a stake in KTM, nothing of the sort is planned within BMW and TVS. That doesn’t come as a surprise, given that BMWs main business is cars.
I’m already looking forward to 2015 and the new sub-500CC BMW Motorrad made in India.
Read the full story here on Wall Street Journal Online: http://online.wsj.com/article/SB10001424127887323550604578409960656038972.html