TVS MOTOR COMPANY LIMITED
ANNUAL REPORT 2002-2003
Speech delivered by Mr Venu Srinivasan, Chairman at the 11TH Annual General
Meeting of TVS Motor Company Limited, held on 12TH September 2003, at
Good morning, ladies and gentlemen,
I have great pleasure in welcoming you to the eleventh annual general
meeting of the company. Year 2002-03 was the first full year of operation
as a truly independent company and I am happy to inform you that TVS Motor
company has recorded excellent results last year.
Highlights of the last year
* TVS Motor recorded its highest ever sales, both in terms of number of
vehicles and sales value.
* The company crossed the magic million mark by selling 1.12 million
vehicles during the year 2002-03, compared to 0.87 million vehicles in the
previous year. The company registered an overall volume growth of 29% led
by motorcycle volume growth of 60%.
* The company's turnover for the year increased to Rs.2726 crores from
Rs.1944 crores last year, recording a growth of 40%.
* Exports turnover increased by 47% to Rs.25 crores (10,152 vehicles) in
2002-03 as compared to Rs.17 crores (7,752 vehicles) previous year
* Profit before tax increased to Rs.201 crores in the year 2002-03, a
growth of over 140%.
* TVS Motor Company won the prestigious Deming prize for its outstanding
performance through company-wide implementation of Total Quality Management
(TQM). We are the first powered two wheeler company in the world to get
Review of Performance - 2002- 03
The two-wheeler industry has grown by 17% during 2002-03 despite the slow
growth in the economy. The growth was largely due to 31% growth in
motorcycles and 29% growth in the ungeared scooter category. India
continues to remain the second largest player in the global two-wheeler
market, with over 5 million units, which is next only to China.
TVS Motor Company has out performed rest of the industry in growth terms -
increasing by 144% in profits, 40% in turnover and 29% in unit sales. Sale
of motorcycles has, in particular increased from 4.5 lakhs in 2001-02 to
7.2 Lakhs in 2002-03, thus registering an exceptional increase of 60%,
Current Economic Scenario
Indian economy is expected to grow faster than 5% during 2003-04. So far
most parts of the country except Tamilnadu, Karnataka & Kerala have
experienced good monsoons. The improvement in rainfall is likely to assist
revival of farm sector and provide the much-needed boost to rural income.
Industrial sector, which has posted a strong growth rate in the first
quarter of the current fiscal year, is projected to grow at 4.5%. Barring
the electricity sector, infrastructure growth has also been higher with
rising cement and steel output consequent to the growth in construction and
On the global front, end of Iraq war and stabilization of oil prices have
provided an added impetus. This is good news for the software & services
industry. The two-wheeler industry, which is closely linked with the
general level of economic activity, is expected to grow over 6%.
Current year performance
The turnover of the company for the first quarter of the current year is
Rs.671 crores as against Rs.632 crores last year same period, registering a
growth of 6%. During the same period of this year, the profit before tax
grew by 18% to Rs.50 crores as against Rs.42 crores in the corresponding
period of last year. In this year, we have achieved exports of Rs 11.2
crores, an impressive growth of 120% over the corresponding period in 2002-
TVS Victor, our first 4-stroke motorcycle in the executive segment, has
been a spectacular success with cumulative sales of 6.5 lakh units so far
since launch. We have introduced New Victor GL incorporating improvements
based on market feedback. During first quarter 2003-04, company has
introduced two new products, Scooty Pep and Fiero F2. The market response
is excellent for both these products. We are planning to launch a new
motorcycle in the second half of this year. The company's performance is
expected to improve further with ramping up of all new product volumes.
New product development and technology
New products are the lifeblood of this industry. So, keeping the long term
interest in view, the company has increased its investments in new product
development and technology.
TVS Victor has helped to establish ourselves in the fast growing executive
segment. With launch of a new bike, this position will be further
Superior performance in the market place is possible only through constant
focus on understanding customer requirements and delivering environment-
friendly, high performance products. Investments will continue in product
and technology development in the future also.
The company has a rigorous system of cost deployment, which is monitored on
a continuous basis and owned by everyone across the organization. In 2002-
03 the Company achieved a total cost saving of Rs.104 crores. ERP system
facilitates in an effective cost monitoring and control. The activity will
be intensified this year. Cost reduction programs will cover both fixed and
variable costs. Sub-system-wise material cost reduction, "Just in Time"
(JIT) and Total Productive Maintenance (TPM) will be the main focus areas
of 2003-04. The company has accelerated "e-buying" and "global sourcing" as
new initiatives to further reduce cost.
Focus on quality and total employee involvement
The company believes that its employees are the foundation of a successful
organization and strives to continuously improve employee participation in
developing higher levels of performance. 100% participation of employees in
TOM has been achieved. The employees have completed more than 1134 projects
through QC Circles in 2002-03. 44 suggestions per employee were received
during the year which saved Rs.16 crores through various employee
The company is aligning its environment system in line with ISO 14001 and
OHSA 18001 for environment, health and safety. Tree plantation is continued
this year also by planting another 9,000 saplings during this year bringing
the total number of trees in the campus to 25,000. Adoption of "Clean
Technology" is given highest priority during expansion of facilities at
both Mysore and Hosur Plants. TVS Motor is facilitating important suppliers
to initiate environment management systems at their workplaces.
The company believes in its social responsibility and is involved in
several community development activities in the villages adopted. An
earthquake hit village "Goyersama" in Bhuj district of Gujarat has been
adopted for relief & development. Dental care camps, eye camps, besides
Leprosy eradication programs have been started in about 200 villages
surrounding Hosur. In addition infrastructure in schools, hospitals and
sanitation facilities are being developed for the benefit of residents of
The board of directors join me in thanking the shareholders for the
confidence reposed in the company. I would also like to express our
grateful thanks to our customers, bankers, financial institutions, dealers
and suppliers for their continued co-operation and invaluable support.
I thank all the employees of our company for their sincere and hard work in
achieving this good performance. But for the team spirit demonstrated at
all levels, this considerably improved performance of the company would not
have been possible.