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TVS Motor to launch two scooters

Plans to foray into Indonesian 2-wheeler market

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TVS Motor is planing to launch two new in the current year and said it would foray into Indonesian scooter market with a new model. Besides, the company also said it would launch diesel version of its auto rickshaw 'TVS King'.

K N Radhakrishnan, chief executive of TVS Motor said that the scooter market will grow faster than two-wheeler industry, due to traffic congestion and Scooter is a family vehicle.

TVS present offerings in the scooter segments include Wego, Scooty Streak and Scooty Pep and two more will be added during the current year. With these launches we can target to increase our market share to 22% in 12 months, he told Analysts.

It may be noted, TVS scooter sales in third quarter dropped to 1.12 lakh units from 1.38 lakh, a year ago.

To enter Indonesian scooter market

The company is also planning to launch one scooter for the Indonesian market by April or May 2013.

It may be noted TVS is one of the few companies, which design, develop and manufacture products for Indonesian market, which dominated by Japanese companies including Honda (with 60 % market share), Yamaha and Suzuki.

TVS Motor's subsidiary in Indonesia PT TVS in has launched Neo in February 2012, followed by new TVS RockZ in May 2012 and then all new TVS Apache in 3 models viz., 160cc, 180cc and 180cc ABS (first in the category).

Two-wheeler industry has been growing at 15% in the last 5 years in Indonesia and expects to grow by 10-12% over the next five years. The Bebeks category which constituted close to 80% of the market five years back has now come down to 40% on the back of growth from the scooters (skubeck) category, where TVS was unrepresented.

During the third quarter, the subsidiary registered total two wheeler sales of 4,767 units in comparison with 4,033 units, a year ago, an increase of around 19%.

The recent acquisition of brand Husqvarna from Germany's BMW by offroad motorbike maker KTM will not have any impact TVS Motor-BMW dialogue for a potential technology tie-up
“Our discussion with BMW is continuing and the latest development do not have any impact on the dialogue,” K N Radhakrishnan, chief executive of TVS Motor told Analyst
According to a Reuters report, BMW acquired Husqvarna in 2007 to improve its position in the field of light, sporty motorbikes and extend the range to include younger customer groups as well as the entire off-road and supermoto sector.
The market in Europe, however, has shrunk almost by half since the deal, and BMW never attained sustained growth of the business in the face of such harsh headwinds.
BMW said it was selling the brand as part of a strategic realignment of its motorcycle business to focus on urban and electric mobility, said in the report.

Diesel autorickshaw on cards

TVS which was selling its TVS King in Petrol and CNG versions is planning to launch Diesel version over the next 3-5 months.

According to Radhakrishnan, this segment growth in the past few years was good due to difference in petrol and diesel price. The current market for Diesel autos is around 30,000 a month.

“Our investment in this would be low, as the design is going to be the same and the target market would be largely domestic market,” he said.

He added, while the southern States of Andhra Pradesh, Kerala and Tamil Nadu are the largest, the company will also focus on other markets including Bihar, Orissa, Rajasthan, Punjab and others, which are developing. “We also need to increase our penetration in Gujarat and Maharastra to increase our market share in overall three-wheeler segment,” he said.

TVS Motor three wheeler sales for the quarter ended December 2012 stood at 13,602 units against 8,899 units in the quarter ended December 2011, an increase of around 53%.

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