* TVS-BMW to develop sub-500cc series of bikes
* BMW technology seen boosting struggling TVS
* Deal could give BMW access to Indian market
* Shares in TVS surge, end day up 10 pct
(Adds quotes, details, adjusts dateline)
MUMBAI/CHENNAI, April 8 TVS Motor Co Ltd
and BMW AG's motorcycle division announced a
deal on Monday to jointly develop bikes that will give the
Indian automaker access to BMW technology as it looks to stem
its falling market share.
The long-awaited deal should help TVS revamp a dated product
pipeline at the company, which has struggled to compete with a
recent ramp-up in activity from Honda Motor Co and
Yamaha Motor Co and could also help BMW gain a foothold
in the world's second-largest bike market.
"We intend to leverage each other's strengths to deliver a
new series of products offering cutting-edge technology for our
customers," TVS Chairman Venu Srinivasan said, adding that the
products would be released in 2015.
Shares in TVS rose as much as 17.3 percent after the deal
was announced, before ending the day up 10 percent at 39.75
rupees ($0.72) on a Mumbai market that ended flat.
TVS will invest 20 million euros ($26 million) in the
tie-up, Srinivasan told reporters. BMW declined to provide
details of its investment in the collaboration.
TVS and BMW Motorrad will develop and produce a series of
motorcycles in the sub-500 cubic centimeter segment, TVS said in
a press release, but each company will sell individual versions
of the bikes through their own distribution channels.
BMW, which sold 117,000 motorcycles in 2012, is heavily
dependent on Western markets such as the United States, Germany
and France, and has a negligible presence in India, where annual
sales trail only China.
The German manufacturer will use the partnership with TVS to
develop small, less powerful motorcycles, BMW Motorrad President
Stephan Schaller said.
TVS has seen its sales fall more than 6 percent this
financial year that ended in March, against a 4 percent rise for
the overall industry, and has struggled since market leader Hero
MotoCorp's 2011 split from former partner Honda
sparked a jump in competition and a market tilt towards
higher-end, more advanced vehicles.
India's No.3 manufacturer in the economy segment of the
motorcycle market, TVS lags well behind its rivals in the
higher-margin premium segment. Premium sales grew by around 25
percent in the year to March 31, outpacing all other major
segments and driving much of Honda and Yamaha's overall rise.
TVS' price to earnings ratio considerably lags Hero and
Bajaj Auto Ltd. TVS trades at an around 25 percent
discount on a one-year forward earnings basis to Hero and Bajaj,
according to Thomson Reuters data.
($1 = 0.7679 euros)
($1 = 54.8350 Indian rupees)
(Reporting by Henry Foy in MUMBAI and Anupama Chandrasekaran in