Aims to capture 18% market share in two years

Two wheeler major TVS Motor Co. Ltd., has started exports of 310cc bikes for German auto major BMW from its Hosur plant near Bengaluru, said a top company official.

The company plans to roll out one new scooter and a motorcycle during this financial year and invest ₹350 crore from internal accruals to expand. It aims to attain a market share of 18% in two years, the official said.

During April 2013, TVS had inked a strategic partnership with BMW Motorrad to jointly design and develop high end bikes to be sold through their respective distribution network.

“The BMW tie-up will lead to a 310cc platform,” said K.N. Radhakrishnan, president and CEO, TVS Motor Company. “The 310cc motorcycle and its engine were developed jointly with BMW on a common platform/architecture.”

BMW would make an official announcement in the “coming few weeks” on production details, pricing, distribution model and number of units shipped so far, Mr. Radhakrishnan said.

However, he said the TVS version on the BMW platform (Akula) will be rolled out during 2017-18.

TVS Motor’s objective is to achieve 18% market share in two years. The company hopes to achieve a market share of 14.2%-14.3% in the year ending March 2017. Next year the target is to achieve 15.5%-16% and 18% during the following year.

The company’s market share in scooters and motor cycles during third quarter of 2016-17 was close to 17% and about 8% respectively. “The industry is poised to grow at 8%-10% and we hope to grow faster than the industry,” he said.

“We had a good sales in the first half of 2016-17. During the third quarter, the company’s market share was 15%. 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 the market will pick up from April 2017 onwards,” he said.

Exports has been a key focus area for TVS Motor. It exports its products to over 60 countries. However, exports to some African countries was impacted due to non-availability of forex. The company is investing in marketing activities across the African region to ride on a strong consumer affinity towards the brand, he said.

TVS Motor exports 60-65% of its three wheelers. It witnessed a dip due to decline in oil prices and currency devaluation.

“The domestic market is completely dominated by regulatory permits. As and when there are opportunities in this market, we will continue to explore them. Nigeria and Ethiopia are most important markets. There is a decline in the industry and the market has gone down by 25%. We hope the industry will recover within the year provided oil prices stabilize,” he said.

TVS Indonesian plant is likely to achieve break even during the next financial year as the losses will be halved to $3 million this year from around $6 million. The plant has a current volume of 3,000 of which 2,500 are exported, he said.