Chennai-based TVS Motor is planning to challenge Bajaj Auto-KTM?s leadership in the 180-250cc premium sports bike market through a major partnership with Germany?s BMW Motorrad, sources close to the development told FE. An announcement on the BMW-TVS tie-up is due in April, which is expected to give TVS access to hi-end technology while BMW will get a low-cost manufacturing partner for the lucrative Indian two-wheeler market.

?TVS will gain in technology for hi-end bikes, which they can later bring down to their lower priced models as well. The plan is to compete with Bajaj in the premium bike markets. While three to four bike models are being discussed, they will initially start with 180-250cc bikes and later go up to 1,000cc sports bikes. The final details of the deal are being worked out and an announcement is expected this month,? a source said while adding that scooters have not been part of the initial talks.

TVS Motor chairman Venu Srinivasan declined to comment on the deal, though a BSE filing by the company said: ?The company is in talks with German auto-maker BMW?s motorcycle division, BMW Motorrad, for a technology tie up and the company will keep the exchanges informed once finality is reached in this regard.?

This development comes after BMW had reportedly held talks for a tie-up with Hero MotoCorp, the country?s largest two-wheeler maker, which had later fallen through on various accounts. Unlike Bajaj, Hero?s focus market currently is the mass 100-125cc bike segments, but even Hero is working on premium sport bikes through multiple tie-ups with US-based Erik Buell Racing, Austria?s AVL and Italy?s Engines Engineering.

Though small with a 3.6% share of the overall 10 million bike market, volumes in the 150-250cc bike sub-segment stood at around 3.5 lakh units in FY13 and have shown flat growth compared with FY12. In the sub-segment, Bajaj-KTM is the market leader with Pulsar?s 180cc and 220cc variants and the KTM Duke 200cc, followed by the TVS? Apache series RTR 180cc.

The last time TVS and Bajaj locked horns directly was over a patent issue related to twin spark technology used in TVS?s Flame 125 bike model. TVS lost the case to Bajaj in 2008 in a Madras High Court ruling.