The Hindu Business Line : TVS steps into Indonesia with Neo

TVS is hoping tomake a small breakinto the Indonesianmarket for stepthrus.The TVS Neohas been developedin-house afterconductingconsiderable marketresearch to identifythe unmet needs ofthe bike buyers inthe country.

— S. Muralidhar

All set for August launch.

Apart from a few blips, such as the current high interest rates, affecting the demand for two-wheelers temporarily, the domestic market continues to hold great promise for bike manufacturers. But that has not stopped homegrown two-wheeler makers from looking to foreign shores.

Both Bajaj Auto and TVS Motor Company are aggressively pursuing new strategies to take their products, existing and new, abroad.

While both have already had a fair bit of success in exporting their bikes to markets that prefer similar two-wheelers, they are now trying to upsize overseas operations by either setting up greenfield plants or through acquisitions.

The company that has taken a head-start in this race is TVS Motor. Earlier this week, TVS' global ambitions received a leg-up with the formal inauguration of its manufacturing facility in Indonesia.

The company made a formal announcement of its plans to set up a new twowheeler plant in Indonesia about two years ago. Now, the TVS facility at Karawang, near the Indonesian capital Jakarta, is already up and producing a step-thru bike tailored for the customers of that country. The company developed the step-thru bike, TVS Neo, in-house after considerable market research to identify the unmet needs of bike buyers in the country.

THIRD LARGEST MARKET

The Indonesian market for two-wheelers is the third largest, after China and India, with a total size of about five million units annually. Stepthrus, also called `Bebek motorcycles' in Indonesia, constitute an overwhelming majority of this market (over 85 per cent) and the three big Japanese two-wheelers makers - Honda, Yamaha and Suzuki - have a stranglehold on the market.

The TVS Neo is set to be launched later this month in the Indonesian market and is expected to be made available to customers there through a network of 60 exclusive dealerships the company is setting up in phases across the country. TVS has invested about $50 million in the Indonesian plant, which has been set up as a subsidiary of the Indian two-wheeler company - PT TVS Motor Company Indonesia.

The plant will initially have a capacity of about 100,000 units of the Neo. Over the next three years, the facility's total capacity is expected to go up to three lakh units per annum. An additional investment of $50 million is also being proposed by 2010 to fund local research and development, new product development and for expanding capacity.

TVS is hoping to make a small break into the Indonesian market for step-thrus. The company knows that breaking into the mindscape of customers, overwhelmed by the Japanese offerings, will be a tough task. But TVS has shrewdly chosen to leverage the new manufacturing facility's additional capacity and the high productivity of Indonesian labour and capital to attempt exporting to the Asean markets.

Over time and after gaining further experience with stepthru style bikes (the Neo is a first for TVS), the company is hoping to export these bikes into markets where similar products are in demand. These could include Brazil and Argentina.

A break`thru'

The new TVS Neo stepthru or `Bebek' motorcycle, features a number of firsts for TVS. The motorcycle was developed by TVS to offer higher number of features and better value to buyers in the segment from Indonesia.

The TVS Neo is short by Indian bike standards and features a wheelbase of 1,260mm. The Bebek bike is offered with one engine option, which is a 110cc, four-stroke mill that generates a peak power of 8.5 bhp at 7,500 rpm and a maximum torque of 8.5 Nm at 4,500 rpm.

The uniqueness of the TVS Neo has been captured by the company's theme badge called Gen-i. The Neo's engine is coupled with a new double clutch technology that TVS has developed. This feature in the Neo is called iRide and it combines the conventional manual and automatic transmissions to enable the rider to choose based on riding conditions.

The rider can use the manual clutch for quick acceleration and for climbing inclines without changing gears, and the automatic transmission can be chosen while riding in heavy traffic conditions.

TVS has also taken with it the dual throttle mode mechanism that it first offered in the Centra for the Indonesian bike.

As a result, the Neo features this technology, called i-Econo, where the rider can visually keep a check on the fuel usage for ensuring better fuel efficiency without compromising the performance of the bike.

The other new technology features include the iStart that offers a temperature sensor in the engine oil sump to assist users warming up the engine to ensure optimum performance and minimise the risk of damage.

The engine itself is offered with a roller follower mechanism to reduce friction and vibrations, thereby leading to improved performance and fuel efficiency.

Other features in the Neo include a digital speedometer, LED pilot lamps and turn indicators, halogen bulbs, cellphone charger slot and keyhole ring that glows in the dark to assist the rider in locating the key slot.

The TVS Neo comes in four trim levels and five colour options.

The top-end variant of the TVS Neo with features such as 17-inch alloy wheels, the double clutch iRide feature and a digital speedo is priced at Indonesian Rupiah 11.8 million, the equivalent of Rs 53,000.

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