TVS plans joint venture with Brazil firm

Two-wheeler maker TVS Motor Company is in talks with a Brazilian automobile manufacturer to set up an assembly joint venture for two-wheelers.

The joint venture, which will be set up in Brazil, will cater to the Mercosur region covering Brazil, Argentina, Bolivia, Chile, Paraguay and Uruguay, aligned along the east coast of South America.

The 1.1 million two-wheeler market in Mercusor is dominated by Japanese giants such as Honda, Yamaha and Suzuki, without much participation from local players.

"Once the JV is set up, TVS has plans to introduce the complete range of two-wheelers starting from step-thrus to regular models such as Victor (motor cycle), Scooty Pep (scooter), and Apache. It will initially ship out key components and engines to South America from its Indian plants," said H S Goindi, senior vice-president, international business, TVS Motor Company.

The company had recently announced its plans to set up another assembly joint venture in Columbia targeted at Andean countries such as Columbia, Peru, Equador and Venezuela (which are located on the North West of South America, aligning with the west coast).

Andean and Mercosor countries cover the entire South America. "The entire South American market of 1.4 million two wheelers is growing at 10 per cent every year. The assembly units could be converted into manufacturing plants once the company crosses the market share of 10 per cent level by 2009," said Goindi.

South America will be the second international base for TVS after Indonesia, where the company is investing Rs 250 crore. The Indonesian operations are expected to begin this year.

The South American market is dominated by high-end two wheelers of Honda, Yamaha and Suzuki. Officials at TVS are confident of capturing a significant market share after the introduction of their unique economic Indian two-wheelers.