The Hindu Business Line : Lack of retail finance hits TVS Motor sales, net profit

TVS Motor Company on Monday reported a 16 per cent drop in sales for 2007-08, over the previous year. The company’s turnover of last year was Rs 3,920 crore, compared with Rs 3,291 crore in the previous year.

Profit before tax for last year was Rs 35.37 crore as against Rs 90.85 crore for the previous year. Profit after tax stood at Rs 31.77 crore as against Rs 66.60 crore recorded last year.

The company has attributed the fall to the lack of a product in the ‘executive segment’ from its stable and non availability of retail finance. These had a “severe impact” on sales, it said.

“TVS Motor Company’s motorcycle portfolio was largely dependent on the entry level StaR range of products. Till the launch of the TVS Flame towards the end of the year, the company was absent in the executive segment,” a press release from the company said.

TVS Motor sold 6.10 lakh motorcycles during the year, against 9.23 lakh in the previous year.

High inflation and restricted availability of retail finance will continue to affect the prospects of the two-wheeler industry, the release said.

However, the company will have the benefit of all the new products launched towards the end of 2007-08. This will help the company to reverse the declining trend in sales and to report improved results. The company can also leverage the capacity created at its Himachal Pradesh plant and its entry into the three-wheeler industry, the release added.

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