TVS Motor Company Ltd, which has slipped from its third position to fourth in the two-wheeler segment, said that Honda Motorcycle gained the market with increasing capacity and aggression after the split with Hero while 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 extend of 40 per cent, to reduce the cost and increase quality.
Speaking to the shareholders in the annual general meeting of the company, Venu Srinivasan, chairman and managing director of TVS Motor. "There is no doubt that we did lose some of our marketshare, especially with Honda had a split with Hero and increased presence with aggression," he said.
He added that the company is looking at strengthening its motorcycle segment by launching at least three motorcycles in the next 15 months and expects the margins to be under pressure since it is in the fourth position now.
The company has plans to have one launch in every quarter, he added. The first product, the 125 cc Phoenix, will be launched in 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 at reducing the number of platforms, to reduce the part count over the next three years. By bringing in its products under seperate 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.
Speaking about building the brands, he said that the company has several legacy brands including XL Super, Scooty, Star City and Apache, while some of the brands launched in between did not became much popular. In 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 effors including expanding presence through social networks like facebook and twitter to leverage the potential. The company has been focusing on quality, productiion 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 the profit, he added. The company is buying parts and subassembly from China, which is the only other country with low cost high quality two wheeler manufacturing capability.
The company expects its Indonesian subsidiary to reach cash break even by end of this fiscal year. The company see a growth in Indonesia, Nigeria and Brazil which are the three major markets and plans are to tap these markets.
Its three wheeler exports this year would be around 35,000 units while last year it was 20,000 units. Company's overall sales of three wheelers would be around 55,000 units. It curently exports three wheeler to countries including Srilanka, Bangladesh, Nigeria, Ethiopia, Egypt, Latin America. The company is also looking at launching a “scooter kind of” product in Indonesia, considering the growth of the segment, soon.