CHENNAI: After the success of its Jupiter range of scooters and a visible pick-up in demand over the last month in urban geographies, TVS Motor is banking on an improved economic climate to push up its market share. Notwithstanding the launch of a new scooter and motorcycle during the next financial year.
According to president and CEO K N Radhakrishnan, the automaker is set to exit the current financial year with a market share of 14.2 per cent in the two-wheeler market. “But, we want to hit the 18 per cent mark in the following two years,” Radhakrishnan said.
The company commanded a market share of around 17 per cent in scooters and 8 per cent in motorcycles as of December 2016.
However, TVS Motor’s objective would also depend on a few factors, not least of which is the recovery of the two-wheeler market in rural geographies, where the brand has significant presence. “Urban demand has largely recovered after the slump of the past few months. But, the rural market is taking some time. For it to recover, we need good monsoons and relief in agriculture. Some southern states have been severely affected due to lack of rains,” Radhakrishnan pointed out.
“We expect rural demand to be better than last year with a healthy monsoon and higher budgetary allocation towards rural development.”
However, the company is also looking to drive volumes and market share with new launches. “We have a completely new scooter and a motorcycle slated for launch in the next financial year. Not including revamps and refreshed versions of our existing products.” To do this, Radhakrishnan pointed out that the company is looking to grow faster than the industry growth of 8-10 per cent, while Rs 350 crore has been set aside for capex during the next financial year. This will be utilised for new products, necessary capacity expansions and research & development. Current R&D spending stands at around two per cent for the company.
On the impending transition to BSIV emission norms, Radhakrishnan said that the company has been ready for a while. “We have completely transitioned to the production of BSIV vehicles from February. But, we have taken on a nominal cost increase ranging between Rs 500 and Rs 1000 based on models. This will lead to a 1.5 to 2 per cent price increase in market prices.”
The company’s three-wheeler enterprise has been affected badly due to a “variety of reasons”, said Radhakrishnan, adding that the industry has seen a slump of as much as 25 per cent over the last year in terms of sales.
“60-65 per cent of our three-wheelers are exported. Exports have been affected by decline in oil prices and currency devaluations in some markets. We hope the industry will recover within the year provided oil prices stabilise,” he said.