TVS Motor to invest Rs 400 cr to raise capacity

TVS Motor Company is planning to invest around Rs 400 crore over the next two years to increase its production capacity to 4 million units. Besides, the company has set a target of Rs 10,000 crore turnover by 2012-end of which 20 per cent will be contributed by exports.

Speaking to reporters after addressing company’s annual general meeting in Chennai, Venu Srinivasan, chairman and managing director, TVS Motor Company said, “consolidation and expanding the capacity will be the priority for the company in 2010-11”.

In the next two years the company would invest Rs 400 crore to increase capacity to four million units from the present 2 million. The proposed investment will be funded through debt and internal accruals, he added.

The company has set a target to reach Rs 10,000 crore turn over by end of 2012. It may be noted, company’s total revenue including other income grew to Rs 4,484.68 crore during the year-ended March 31, 2010, from Rs 3,741.18 crore, a year ago.

“We will close the present fiscal with a turnover of Rs 6,000 crore and we are on track to achieve our business target.”

The company is eyeing around 17 per cent market share during the present year, in the two-wheeler segment, compared to 15 per cent last year.

To support domestic customers, the company has infused around Rs 100 crore in TVS Credit.

Commenting on exports, Srinivasan said, presently exports contribute 7-8 per cent which will increase to 20 per cent by 2012.

“Indonesian subsidiary PT. TVS Motor Company, will play a significant role in this,” he said.

TVS Motor has made an additional investment in the subsidiary company to the tune of Rs 93.55 crore, through the company’s wholly-owned foreign subsidiary TVS Motor (Singapore) Pte Ltd.

The Indonesian subsidiary will cater to markets South East Asian countries, Iran, Nigeria and Brazil, he added.

The subsidiary company is in its third year of operation has so far sold around 30,000 vehicles. In 2009, the company launched a new 125 cc bebek TVS RockZ in the market. “We will increase our distribution network to 500 from 106 in Indonesia and to increase the sales to 10,000,” he said.

To support the subsidiary company, TVS Motor, is planning to set up a research and development centre in Indonesia. “We will start with design centre first and then will expand to R&D,” he added.