For now, TVS will focus on BS-VI and not electric: Venu Srinivasan

Expects two-wheeler industry to grow by 10 % in 2018-19

While the government is trying to promote electric vehicles (EVs), two-wheeler makers are saying EVs still don't make commercial sense -- with TVS Motor being the latest to join the bandwagon. Honda has already said that it is not looking at this space since it is not economically viable.  

Meanwhile, TVS has lined up a capital expenditure (capex) of around Rs 7 billion and investment of around Rs 1 billion in its subsidiaries. 

TVS Motor Chairman Venu Srinivasan said that the biggest challenge and disruption will be the BS-VI emission standard in 2018-19 and the company's focus will be on addressing it.

"Electric doesn't make any economic or commercial sense now, so the focus will be only on BS-VI," said Srinivasan, who had earlier said in 2018 that TVS would launch hybrid and electric vehicles. The two-wheeler maker had also invested in a start-up that is working on electric vehicles.  

Earlier, TVS had said it was planning to launch an electric vehicle in 2018. In February 2018, it showcased its electric vehicle, Creon, at the AutoExpo.

Srinivasan said that TVS would be ready with BS-VI vehicles six months ahead of the deadline fixed by the government and the apex court. "It will be a challenge as nowhere in the world the journey (to BS-VI) was so fast, still we will be able to (do it)," he added.

Addressing analysts on Tuesday, TVS Motor President & CEO K N Radhakrishnan said that the company has lined up around Rs 7 billion capex towards BS-VI, new products and on technologies. The company would also invest Rs 1 billion in its subsidiaries, he added.   

Speaking on the two-wheeler industry, Srinivasan said that it was expected to grow by 10 per cent in 2018-19, adding that the major competitive threat would be BS-VI implementation.

"We will grow ahead of the industry," said Radhakrishnan.

In 2017-18, the major challenges were demonetisation, the goods and services tax, and emission norms ( BS-III to BS-IV), but infrastructure improvement and road projects improved customer demand, said Srinivasan. 

"We need to keep launching vehicles to keep the excitement around the brand," said Srinivasan, adding that the company was targeting a 16-per cent market share. Its focus has been on scooters, premium motorcycles, and mopeds, but the company's share in the commuter motorcycle segment is not satisfactory and the company will see a thrust in this segment.  

Going forward, the focus will be on the earnings before interest, tax, depreciation and amortisation (Ebitda), which was earlier sacrificed for market share.

Radhakrishnan said that despite an increase in material cost and high discounting in the market, the company managed to increase its Ebitda to 7.4 per cent from 6.7 per cent.