TVS Motor plans Rs 600 crore spread

Two-wheeler maker TVS Motor Company said it has earmarked an investment of Rs 500-600 crore for the next two-three years of which around Rs 100 crore may go into setting up an assembly line or manufacturing unit in a south-east Asian country.

"A decision on our overseas manufacturing plans is likely in the next six months," CP Raman, president, TVS Motor, said here at a press conference to announce the launch of the company's new motorcycle Centra.

He said that the overseas investments may not be more than Rs 100 crore, and the nature of the project and investments will be largely determined by customs duties and other taxes applicable on manufacturing and imports in the target country.

Though Indonesia and Thailand are the destinations of choice, Raman said he did not wish to commit on such plans until "we have stabilised our domestic business." The company which parted ways with Japan's Suzuki Motor more than two years ago, and has made an impact with the indigenously developed 110 cc four-stroke bike Victor, is struggling to maintain volumes due to dwindling demand for its two-stroke bike Max.

Raman said new variants of Victor will be launched soon, and together with the Centra, will fetch more volumes during the year.

The company is expecting 3-4 per cent sales growth this financial year to 1.1 million units, of which motorcycle sales will remain flat at a little more than 700,000 units.

The company, which has two motorcycle manufacturing units - in Hosur and Mysore - will ramp up production capacity to two million units next year.

It also hopes to sell 1.2 million motorcycles and an overall 1.6 million two-wheelers in the next financial year. Out of this, 300,000 units will be the Centra, which the company claims is the most fuel-efficient motorcycle in the country today.