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Not quitting 2-wheeler space, will focus on niche market: M&M

Wednesday, Oct 26, 2016,13:13 IST By Metrovaartha A A A

Mumbai | Mahindra Group today it has no plans to quit the two-wheeler segment, where it is facing losses, and will focus on niche market as it announced acquisition of iconic British motorcycle brand BSA as well as branding rights of Jawa bikes.

The firm said it has acquired Classic Legends, owner of the 175-year-old brand BSA (Birmingham Small Arms Corp), as also the branding rights of the Czech Republic-based Jawa motorcycle, which earlier had the Yezdi bikes in India.

The move is part of its strategy to refocus on the two-wheeler business and target premium niche segment.

The management buyout of ailing BSA is for a small amount of around Rs 23 crore, sources said, while for Jawa it is brand royalty payments only.

M&M entered the two-wheeler business after buying out Kinetic Engineering and has brands like Centro, Gusto and Mojo.

Recently, facing deepening loses, the company halved its dealerships and staff. It said today that it will not invest in Centro and Gusto though it will continue to sell the models.

“With the acquisition of Classic Legends, M&M aims to co-create a lifestyle mobility company with exciting and relevant partners across products and services, and enter into previously untapped segments using iconic brands like BSA and Jawa,” M&M Executive Director Pawan Goenka said.

Asked about investment into these brands, Goenka said they will pump in Rs 300-350 crore over the next two years.

“Classic Legends would leverage the best global capabilities in design and engineering, along with the expertise available at Mahindra Racing’s technical development centre in Italy, to design and launch products that capture the brand DNA and ethos of these iconic brands,” he said.

He said the company has no immediate plans to bring the BSA models to India as they are very premium, and will focus on Europe and the US. Jawa brands will be manufactured at Mahindra Two Wheelers’ Pitampur plant in Madhya Pradesh and will be initially marketed in Indonesia and Vietnam.

One reason for not bringing BSA models to the domestic market also arises from the legal battle over the brand as the British company is fighting a case against BSA Cycles here, Goenka added.
Both BSA and Jawa have heritage value and consumer following in many parts of the world.
BSA, which has a global appeal, will be primarily suited to international markets, and Jawa, with its cult following in India, is more suited to the domestic market.