Two-wheeler auto-major TVS Motor said it would close financial year 2017 with a 14.3 per cent market share, close to its target of 15 per cent. The company also said it would be launching one new bike and scooter and that it had plans to invest Rs 350 crore in financial year 2018.
K N Radhakrishnan, CEO, TVS Motor, said that during the third quarter, the company's market share was 15 per cent. But from November to February, due to demonetisation, poor monsoon and other factors, the industry slowed down and so did the company's growth.
"We hope to exit at 14.2-14.3 per cent market share in the current financial year. While the objective is to achieve 18 per cent market share over the next two years," said Radhakrishnan.
The company's current market share in scooters was close to 17 per cent in the third quarter of 2016-17 and it had around eight per cent market share in the motorcycle segment in the third quarter of 2016-17.
Meanwhile, for 2017-18, the company has lined up capital expenditure of Rs 350 crore for new products and capacity expansion.
"We will further our portfolio with new launches and upgrades of existing products," said Radhakrishnan.
Radhakrishnan said that the industry was poised to grow at 8-10 per cent and the company hoped to grow faster than the industry.
The company also expected rural demand to be better than last year with a healthy monsoon and higher budgetary allocation towards rural development.
Further, the company cited economic development, good monsoon, construction of reservoirs, good agricultural output, and investment in infrastructure as reasons which would lead to a revival in rural demand.
On TVS' tie-up with German automobile giant BMW, he said that the company would be focusing on premium bikes and the high-end segment.
"The BMW tie-up would lead to a 310cc platform. The TVS version on the BMW platform (Akula) would be rolled out during 2017-18," said Radhakrishnan.
Recently, TVS started exporting products for BMW to Germany. These products are manufactured at TVS' Hosur facility, near Chennai.
On the Indonesian subsidiary, he said that the Indonesian arm was expected to break-even by next year. He noted that, already, the loss had been brought down by 50 per cent in 2016-17.
Here are TVS' big plans:
Here are TVS' big plans:
BSIV norms
- We always maintain a healthy trade stock of 30 days
- As part of our plans to gear up for the BSIV norms, we have completely transitioned to the production of BSIV vehicles from February
- We have taken a nominal cost increase ranging between Rs 500 and Rs 1,000 based on models. This will lead to 1.5 to two per cent price increase
Demonetisation
- Due to the demonetisation exercise, the company witnessed a short-term impact on sales in Q3 and Q4. However, it is a very good move for the country in the long term. We hope that the market will pick from April onwards.
Exports
- We export to over 60 countries
- Exports are a key focus area for the company.
- Exports to some African countries have been impacted due to non-availability of forex
- We are investing in marketing activities across the African region to ride on a strong consumer affinity towards the brand
Three-wheeler business
- The domestic market is completely dominated by regulatory permits. As and when there are opportunities in this market, we will continue to explore them
- 60-65 per cent of our three-wheelers are exported
- As far as exports are concerned, Nigeria and Ethiopia are most important markets
- There is a decline in the industry and the market has gone down by 25 per cent
- Exports have been affected by decline in oil prices and currency devaluation
- We hope the industry will recover within the year provided oil prices stabilise
GST
- The Goods and Services Tax (GST) is definitely one of the most important tax reforms in the history of India. We are prepared and ready to roll out GST.
Indonesian business
- Our losses have come down by half (From $6 million to $3 million) and we hope to break even by next year
- Current volume is 3,000 per month out of which 2,500 is exported
Moped Capacity
- Current capacity is 75,000 to 85,000 per month
- Capacity expansion is never an issue as it does not take more than three months