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TVS Motor eyes 15% market share by end of the fiscal

TVS takes the road test

 

The country's third largest two-wheeler company TVS Motor has said that it will close the current fiscal with a market share of around 15 per cent and in the next two years it will increase it to 18 per cent. The Chennai-based firm closed the fiscal 2016 with a market share of around 13 per cent and it has increased it further to 13.5 per cent during the first quarter of 2016-17.

TVS said that to achieve this market share it need to grow by around 15 per cent during the current fiscal, while it expects the entire two-wheeler industry to grow by 8-10 per cent.

In 2015-16, total two-wheeler sales in the country were 1,64,55,911 units as against 1,59,75,561 units a year ago.

Urban markets will continue to drive the two-wheeler industry in 2016-17, fuelled by 7th Pay Commission disbursements. Recovery in rural India due to monsoon will improve demand in rural markets, said K N Radhakrishnan, president & CEO, TVS Motor.

He is betting big on 'TVS Victor' 110cc, which helped the company to clock around eight per cent market share in the executive segment, and its scooter 'Jupiter'.

First made-in-India BMW two-wheeler to roll out from TVS Motor factory by October TVS Motor says it has started manufacturing product for BMW at its Hosur unit. First product will be launched after October by BMW; TVS to launch its product by fiscal-end; both vehicles will be on same platform. It will be a 310cc vehicle; BMW Motorrad unveiled the G 310 R in last October last year. Products are jointly developed and manufactured at TVS Motor's factory in India BMW refers to the motorcycle as "a one-cylinder roadster in the extraordinary design of a stunt bike". In 2013 the two companies announced co-operation, said they'd invest Euro 20 million in the project. TVS currently address premium segment with its product Apache, which claims market share of 17% and expected to grow to 22%.

 


Jupiter alone contributes around 45,000 units of overall company's scooter sales of around 65,000 units a month. Total market share of the company in the scooter segment is around 14 per cent.

During the current fiscal, the company would invest around Rs 400 crore towards product development, capacity expansion, marketing and others.

Radhakrishnan hinted that besides a product from the BMW platform (CHECK BOX), one more product would hit the market during the current fiscal. However he declined to comment whether the new product will be scooter or a motorcycle.

He said, existing capacity would be sufficient for the next 18 months as the current capacity utilisation, across the three plants, is around 85 per cent.

He ruled out possibility of launching a product during the festival season, as he believes that may reduce the momentum of Victor and Jupiter.

The company will focus on increasing commuter market share by leveraging the success of TVS Victor 110 by holding the entry level market share with relevant marketing and product refresh actions on TVS Sport and TVS StaR City+.

TVS expect EBITA margin to grow to double digit in the next 2-3 years. "We are focussed more on market share considering we want our distribution and others partners in the value chain also should grow."

On exports, he was hopeful that from the second quarter it will grow from the current negative trend. Company's focus will be emerging markets including Latin America, African and Asia.

He also said that the Indonesian subsidiary will turn cash positive from loss from the last quarter of this fiscal or from the first quarter of next fiscal.

In 2015-16, PT.TVS Indonesia (PT TVS) EBITDA loss during 2015-16 was lower at $6.8 million compared to $7.7 million loss in 2014-15. Radhakrishnan believes that the company's new strategy, focussing more on exports, will help the company turn positive.