TVS Motor Company set to gain a stronghold in Eastern India

The Memorandum of Understanding(MOU) that TVS Motor Company had with Mahabharat Motors Manufacturing Company, West Bengal has been dissolved as per the directions of Partha Chaterjee, Commerce and Industry Minister, Government of West Bengal . According to this new demerger process, TVS Motor Company can invest in this venture provided the Government regulations give their go ahead. Earlier on, as per the MOU, TVS were to train the personnel of Mahabharat Motors Manufacturing Company in the same manner as they would to their personnel located in other facilities. Commercial production began at the duo's facility from September 2010. 1000 motorcycles is the number that TVS expects to manufacture each month, initially. This facility would also be used to service the North East as also West Bengal markets. The existing staff and workers of Mahabharat Motors Manufacturing Company would be retained. As of now, TVS has 3 manufacturing facilities within India in Tamilnadu, Karnataka and Himachal Pradesh. These plants are being used to manufacture both 2 and 3 wheelers.

Here is the press release:

Mumbai 5 November 2011: The Commerce and Industry Minister, Government of West Bengal, Mr. Partha Chaterjee, today handed over to TVS Motor Company and Mahabharat Motors Manufacturing Company, the in-principle permission granted by the West Bengal Industrial Development Corporation Limited for the demerger of the two wheeler business of Mahabharat Motors Manufacturing Company, into a separate company through the court process of demerger. After the demerger, TVS Motor Company will invest in this new venture subject to approval that may be required by law and Government Regulations. TVS Motor Company, which had entered into a Memorandum of Understanding with Mahabharat Motors Manufacturing Company, West Bengal in 2008, will thereby take a larger role in the demerged company and facilitate stronger presence in the eastern region of the Indian market.

It may be recalled that as per the MOU, which was signed in 2008, TVS Motor Company was to provide technical support for the manufacturing facility. In addition, TVS Motor Company was to train personnel as per the quality procedures and standards followed at its other assembly plants. The manufacturing facility was created in accordance with the MOU and commercial production commenced in September 2010. TVS Motor Company will retain the existing staff and workers of Mahabharat Motors Manufacturing Company and it expects to manufacture initially around 1000 motorcycles per month. TVS Motor Company will also use this facility as a hub to service West Bengal and North East markets. TVS Motor Company currently has three world class manufacturing facilities within India in Tamilnadu, Karnataka and Himachal Pradesh to manufacture two and three wheelers.