TVS loses steam as 2-stroke sales sputter

Sales at TVS Motor Company, a two-wheelers major, took a battering in the financial year 2003-04 due to the shrivelling market for two-wheelers with two-stroke engines.

The bikes company has reported a marginal 2.5 per cent year-on-year growth in sales volume during the financial 2003-04, compared with 29 per cent in 2002-03.

"Our sales growth was affected by the shrinking market for two-stroke engine products," H Lakshmanan, executive director, TVS Motor, said.

"The company is planning to push its four-stroke product line during the next year to regain the lost ground." TVS Motor is placing its bet on four-stroke models in the different segments, such as the hopped-up Fiero FX and Scooty Pep.

The company will soon launch variants of Victor and and Max. The recently launched Centra, too, has been successful.

Even though the fiscal 2003-04 has been bad, the company's overall sales during March 2004 rose 18 per cent month-on-month to 1,00,591 units. Motorcycle sales grew 12 per cent to 62,060 units during the month, while scooterette sales rocketed by 84 per cent to 15,512 units.

Sales of mopeds vaulted by 10 per cent growth to 23,019 units. The mopeds segment remains a line where TVS Motor continues to reign.

Exports of the company during the fiscal have also been benevolent. The firm registered a 176 per cent growth in exports during the fiscal and 146 per cent rise in March.

Meanwhile, the company has got clearance from the Madras High Court for the merger of Lakshmi Auto Components with itself.

As per the merger arrangement, for every seven shares of Lakshmi Auto of Rs 10 each, the shareholders will get 10 shares of TVS Motor valued at Rs 1 per share.

Under the proposed scheme of amalgamation, the rubber and plastics business of Lakshmi Auto is considered sold to the unlisted group company, Sundaram Auto Components, for a consideration of Rs 12.25 crore.

The engine components division of Lakshmi Auto is now being merged with TVS Motors.

The sale of Lakshmi Auto divisions to Sundaram Auto Components is with effect from April 1,2003 and the merger is effective from April 2, 2003.

The record date for the merger has been set on April 23, 2004.