Companies

TVS Motor plans to consolidate global biz

G Balachandar Chennai | Updated on July 29, 2020 Published on July 29, 2020

Domestic market opens up gradually

TVS Motor Company is aiming to grab a larger market share in the overseas market. To do so the home-grown two and three-wheeler maker is consolidating its international business with a three-pronged strategy.

It plans to strengthen its presence in existing international markets with more product launches, enter new markets and use of its Indonesian operations as a base to serve export markets.

“Our long term vision is to consolidate our presence in the African and Latin American markets and also improve our market share in some of the countries where we have scope for improvements,” Sudarshan Venu, Joint Managing Director TVS Motor Company told shareholders during the company’s virtual annual general meeting on Wednesday.

He said TVS Motor would launch newer products to consolidate its position and the company was devising a strategy to improve exports from its Indonesian plant, which makes some unique range of products.

The company’s Indonesian arm, PT TVS, achieved a positive EBITDA of $0.75 million in FY20 as against a loss of $3.04 million in FY19. It achieved break-even by posting an operating profit for the second half of 2019-20.

“So, over the next 3-5 years, we will continue to focus on the international side of the business in improving market share, customer satisfaction and entering new markets,” said Venu.

Meanwhile, TVS Motor’s acquisition of the UK’s premium motorcycle brand Norton Motorcycles is expected to help the company strengthen its international business further.

“While we have a long term strategic partnership with BMW, the Norton enhances TVS Motor’s global portfolio, brings complementary product segments, markets and capabilities in the super-premium category,” said Venu Srinivasan, Chairman & Managing Director of TVS Motor.

He also said company’s new launches in high-end bike segment paid dividends as TVS Motor had garnered 23 per cent share in the premium category. “Going forward, we do look at premiumisation as one of the ways of improving our profit margins both in domestic and international markets,” he added.

On the domestic two-wheeler market, Srinivasan said the market was opening up gradually after the lockdown and the company was expected to overcome the disruptions in supply chain and labour constraints in Q2.

“Q2 looks better as of now, but we have to see how the rest of the year will pan out and therefore I am refraining from making any forecast of what the year will look like. We are taking many efforts to manage profitability,” he added

Q1 results

The Company has reported a loss of ₹139 crore for the quarter ended June 30 2020 as against profit after tax of ₹142.3 crore in the year-ago quarter as both production and sales were severely impacted during the quarter due to Covid-19 lockdown and therefore reflected what was an unprecedented situation.

Its revenue stood at ₹1434 crore as against ₹4470 crore in the year-ago quarter, on the back of a significant drop in two-wheeler sales including exports, which were 2.55 lakh units as against 8.84 lakh units. Bike sales decline to 1.19 lakh (4.17 lakh units), while scooter volumes fell to 0.82 lakh units (2.95 lakh units).

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Published on July 29, 2020
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