The Hindu Business Line : TVS Motor plans to hasten new launches

TVS Motor aims to replenish its motorcycle range with variants at shorter intervals to keep pace with customers' preference for newer vehicles and improve its profitability.

The company's profit after tax in the third quarter of the current financial year was Rs 27.50 crore, down by 15.33 per cent in relation to the corresponding period of the previous year.

While announcing the results last week, Mr Venu Srinivasan, Chairman and Managing Director, felt the performance could have been better had the company introduced a variant to its successful motorcycle brand, Victor, in September 2003. "New variants are required at least once in two years. The (product) cycle has dropped from six years," he said.

The Victor, a four-stroke motorcycle with a 110-cc engine, was launched in September 2001. Over eight lakh Victors have been sold, and the company plans to introduce a 125-cc engine variant in April this year.

Not only do new products attract customers, they also improve the company's realisation. "New products are clearly getting a better price," said Mr Srinivasan. Another benefit of new products is a "good topline."

Elaborating on changes in customers' preferences, Mr Srinivasan felt that style had become an important factor in attracting them. Consequently, the executive segment of motorcycles (roughly the Rs 35,000-Rs 45,000 range) required a "quicker facelift."

He attributed the decline in third quarter profit to a combination of a rise in marketing expenditure and a fall in the sales of two-stroke motorcycles. He felt the launch of the Victor variant in April, and the introduction of a four-stroke motorcycle this month, Centra, would help the company improve its performance in the near future.

In future, TVS intends to expand its reach to East Asia. Mr Srinivasan narrowed the company's East Asian foothold to one of three countries: Indonesia, Thailand and Vietnam.

The company expects to finish with market survey and investment estimates by the middle of the year.

He did not rule out the possibility of associating with a local company for distribution in its East Asian expansion. He stated that TVS Motor would "like to be a major Asian player independently."

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