BMW Motorrad and TVS Motor Company have entered into a joint technical co-operation and manufacturing agreement to build and sell bikes below 500cc.
According to the deal signed on Monday, which envisages no equity participation, TVS Motor will make the bikes under both TVS and BMW brands at its existing manufacturing facilities in Hosur or Mysore.
"The agreement will bring together the expertise of both the partners. BMW Motorrad is known for technology, quality, reliability and engineering perfection while TVS Motor's strengths include ability to develop smaller bikes, mass production and a robust supply chain," said Venu Srinivasan, Chairman, TVS Motor Company.
According to the agreement, the bikes will be manufactured by TVS Motors under TVS and BMW badges and both the partners will sell the bikes in India and overseas through their respective distribution networks.
The Indian company will invest 20 million euros and the first product will roll out in 2015.
Stephen Schaller, President, BMW Motorrad, added that this agreement was part of the German company's focus re-alignment which includes foray into motorcycles below 500 cc. At the moment the company produces bikes from 650 to 1600 cc.
"Both the partners will benefit immensely from this agreement," he added.
Shares of TVS Motor on Monday shot up by 9.90 per cent to close the day's trade at Rs 39.85 on the Bombay Stock Exchange.