TVS Motor Company Ltd, which has slipped from its third position to fourth in the two-wheeler segment, said Honda Motorcycle had gained market as it had grown more aggressive since its split with Hero. But, the company has faced some issues in the motorcycle segment.
The company would rationalise the two-wheeler platforms into a few common platforms to reduce the number of parts used in various models, to the level of 40 per cent, to reduce the cost and to increase quality.
Speaking at the annual general meeting, Venu Srinivasan, chairman and managing director of TVS Motor, said, “There is no doubt that we did lose some of our marketshare, especially after Honda split with Hero and turned more aggressive.”
He added that the company was looking to strengthen its motorcycle segment by launching at least three motorcycles in the next 15 months and expected the margins to be under pressure since it was in the fourth position now.
The company plans to have one launch every quarter, he added. The first product, the 125 cc Phoenix, will be launched this September, “and every quarter we will come out with a product,” he said.
The problem of being in third or fourth, be it TVS Motor or any other company, is that the margins would be under pressure and you find more pressure in terms of dealers and geographies, said Srinivasan.
The company is looking to reduce the number of platforms over the next three years. By bringing in its products under separate common platforms, the company would be able to simplify and reduce the number of parts by 40 per cent. This would also increase the durability and quality of the products, he added.
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On building the brands, he said the company had several legacy brands including XL Super, Scooty, Star City and Apache, while some of the brands launched in between did not become much popular. In the next three to four years, the company would have very few new brands, while the focus would be on strengthening the current brands.
The company is also planning e-marketing efforts, including expanding its presence through social networks like Facebook and Twitter to leverage the potential. The company has been focusing on quality, production and supply chain for the last two years and the next two years the focus would be on new products and new markets, he added.
The effort in the next 15 months would be to substantially increase profits, he added. Later, he told reporters that the company is buying parts and sub-assemblies from China which is the only other country with low-cost high quality two-wheeler manufacturing capability.
TVS expects its Indonesian subsidiary to reach cash breakeven by the end of this fiscal year.
The company sees a growth in Indonesia, Nigeria and Brazil, which are the three major markets and plans are on to tap these markets.
Its three-wheeler exports this year would be around 35,000 units while last year it was 20,000 units. The company's overall sales of three wheelers would be around 55,000 units.
It exports three-wheelers to countries including Sri Lanka, Bangladesh, Nigeria, Ethiopia, Egypt and Latin America.
The company is also looking to launch a “scooter kind of” product in Indonesia, considering the growth of the segment, soon.