Why Mahindra Bought BSA?

The big news in the Indian two wheeler space is that of a subsidiary of Mahindra and Mahindra acquiring the iconic British motorcycle brand, BSA for around Rs 28 crore. The news follow rumours floating around for some time that Mahindra is looking at acquiring one of two known British motorcycle brands - BSA or Norton.

Mahindra owns 60 per cent of Classic Legends Private Limited (CLPL), a company which is just over a year old and which has now bought over the BSA brand. BSA, or Birmingham Small Arms Company is one of the most famous British motorcycle brands, dating back to 1910 when BSA produced its first motorcycle. BSA even owned the Triumph brand at one point and at its peak, was the largest motorcycle producer in the world. By the 1970s, BSA stopped making motorcycles.

(BSA Motorcycle)

The move enables Mahindra to acquire all of the BSA licensing for marketing and merchandising products under the BSA name globally, opening a world of opportunity for re-launching and re-establishing the classic British motorcycle marquee as a 'new' global motorcycle brand. This is not the first time though that Mahindra has taken the acquisition route to establish itself as a noteworthy player in the two wheeler space.

In 2008, Mahindra acquired Kinetic's two wheeler business in an effort to get a foothold in the rapidly expanding two wheeler business. Mahindra already has several products in the two wheeler market - automatic scooters, commuter motorcycles and more recently, entered the entry-level premium motorcycle segment with the 300cc Mahindra Mojo. Last year, Mahindra purchased a 51 per cent stake in Peugeot motorcycles and even displayed three models from Peugeot's line of premium scooters at the 2016 Auto Expo.

(Vintage BSA Motorcycle ad)

Having been unable to make any noteworthy impression in the budget segments, it is through acquisitions like these that Mahindra intends to offer premium, world class products and establish itself as a global two wheeler manufacturer. The idea behind the BSA acquisition is to revive the brand, use in-house R&D facilities as well as use Peugeot's engineering expertise to develop new products under the BSA name.

The BSA brand, having been one of the most well-known British motorcycle brands along with the likes of Triumph, Norton and even Royal Enfield, has considerable clout and recall. With Triumph already establishing itself with a line of world-class products, both in the 'modern classic' genre as well as completely modern sporty roadsters and cruisers, Mahindra may be looking at emulating some of Triumph's success and even Royal Enfield closer home.

(1954 BSA Gold Star)

With the right market strategy and product development in place, Mahindra could well have a winner in the BSA brand. Brands like Peugeot and now, BSA will help develop brand equity which Mahindra has so far been unable to tap into. Most of all, with the BSA acquisition, Mahindra has tremendous opportunity to establish itself as a manufacturer of high quality 'premium' motorcycles.

For now, the BSA brand acquisition seems more than just a statement by Mahindra in the motorcycling space. What remains to be seen though is how Mahindra formulates a successful roadmap for reviving the BSA brand and more importantly, what product development strategy is undertaken.