TVS-Suzuki has decided to convert its entire range of two-wheelers into four-stroke. It will flag-off this conversion with the launch of its four-stroke scooter, code named Neon, on October 1 in New Delhi.
"We plan to phase out production of all our two-stroke vehicles by the year 2005. It is not possible to meet future emission norms with two-stroke engines. We also propose to introduce a four-stroke motorbike in June 1999 followed by a four-stroke version of Scooty. We will also launch four-stroke mopeds after the Scooty launch," said TVS-Suzuki chairman and managing director Venu Srinivasan.
The company's four-stroke scooter project is expected to drive the company towards a turnover of Rs 1600 crore during the 1999-2000 fiscal. The company had recorded sales of Rs 1018 crore last year.
The company will be investing around Rs 500 crore in five years for this transition. It has pumped in Rs 180 crore in a new plant near Mysore, which will manufacture four-stroke scoters, and at a later stage the four-stroke Scooty.
Its existing plant at Hosur, which now produces around 7.5 lakh vehicles a year, will be upgraded for manufacture of new motorbikes. The technological know-how for the motorbikes will be provided by Suzuki. The Hosur plant will have a capacity of a million vehicles next year. The Mysore unit, which at present manufactures 1.5 lakh scooters a year, can be upgraded to produce around 5 lakh scooters with an additional investment of Rs 50-60 crore.
TVS-Suzuki plans a spate of launches in the next six months. It launched its new moped, TVS Excel Super, in the middle of this year, and company officials claim it to be a run-away success contributing 35 per cent of moped sales.
Further, a face-lift for Scooty will be done in two stages, the first of which is to be launched in November. Other than cosmetic changes on the head lamps and handle rack, the engine will be souped up with suspensions and improved braking.
A 140-cc Shogun will be out by March 1999 and variomatic versions of the four-stroke scooter will hit the market early next year.
The launch of Neon (the launch name, probably starting with S, will be finalised by Sunday) will mark TVS-Suzuki's entry into the 1.4 million vehicle scooter market dominated by Bajaj and LML.
Neon will have a 150cc four-stroke petrol engine in a tubular frame. Bajaj, which launched its four-stroke scooter Legend a few weeks back, has applied for a patent for its four-stroke engine in a monocoque frame.
"The engine and styling have been designed in-house, though we consulted overseas experts for validation and comments at every stage," said Srinivasan.
According to Srinivasan, the scooter project will break-even in the first year itself and achieve pay-back after four years.
Company technicians said fuel efficiency will be on par with four-stroke motorbikes. In city conditions, Neon should give a minimum of 60-62 kmpl. The engine can produce 8 bhp at 8000 rpm and a torque of 7.8 Nmt. Neon weighs around 120 kg and has space for a helmet under the seat. The kick-starter on the left might surprise regular scooter users.
"We will be launching the scooter in New Delhi on October 1, then all-over North India, state by state. By April, it will be available all-over India," said Srinivasan.
TVS Suzuki is a marginal player in north India which accounts for 70 per cent of the scooter market. But it has broken through in states like Maharastra, Gujarat, Rajasthan and Madhya Pradesh with its mopeds and Scooty. It has a third of the moped market in these states. Moreover, Scooty has also given it a toe-hold in the north. The company has a 20 per cent market share in the domestic two-wheeler market.
"Five years ago, I would have accepted that we were a south India-based company, with little presence in the north. But now, our motorbikes, Samurai, Shogun and Shaolin, have made an impact and are selling well in the northern states. With our new launches, we will soon be a serious contender in the north Indian market as well," said Srinivasan
The company is looking to capture 10-12 per cent of the scooter market in the next two years. It is also trying to export the scooters to South America and Europe. It has set a target of exporting 10 per cent of scooters in two years.
Neon's ex-factory price is Rs 28,000, though on the road tag might be around Rs 37,000. "We will position it as a premium product above Bajaj Chetak and Super. We see two-stroke scooter owners switching over to Neon. We are also hopeful of attracting four-stroke bike users, who opted for bikes due to the absence of four-stroke scooters," added Srinivasan.
Ogilvy and Mather (O&M) will be handling the launch of Neon, for which the company will spend around Rs 12 crore out of its Rs 50 crore marketing budget. The advertising campaign will initially consist of print ads and will latter be followed by commercials in October.
