German top-of-the-range carmaker BMW, which also makes high-powered motorbikes, announced an agreement with India’s TVS Motor Company on Monday to produce small-engine motorcycles.

“The aim of the cooperation is to join forces to develop and produce motorcycles in the segment below 500 cubic centimetres,” the German group said in a written statement.

Stephan Schaller, who heads BMW’s motorcycle unit, said the group was expanding its product range “to tap into fresh growth potential” amid changing motorcycle markets, demographic developments and environmental demands. Small motorbikes are highly popular in emerging markets such as India.

TVS Motor Company is one of India’s largest motorcycle manufacturers, producing annually two million vehicles and with a turnover of more than $1 billion.