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TVS gears up with launches

Source : BUSINESS_STANDARD
Last Updated: Tue, Sep 17, 2013 21:01 hrs
TVS Motor July sales rise 14 pct to 189,962 vehicles

TVS Motor Company (TVS) has gone the opposite direction of the Indian scooter market. While, the scooter industry, dominated by gearless variants, grew by 14 per cent, TVS recorded a decline of 14.6 per cent in 2012-13 over 2011-12. Both old and new players have ridden the comeback of the scooter on Indian roads but TVS missed it.

It plans to mend matters soon. The company says it will be introducing a new two-wheeler every quarter. It started off with some brio by launching Jupiter, a scooter targeted at men.



Admitting to TVS having slacked off with launches, Venu Srinivasan, its chairman and managing director, says, "In the last three years, we were slow in launching new products, since we focused on improving the quality and development of the products. From now on, every quarter we will launch one new model." But an analyst points out this could have led it to lose to competition, "TVS is more of a process-driven company. But that won't help in the current times. It should get more aggressive in launching and marketing the products now".

While TVS took its time, competition from Honda Motorcycle and Scooter India (Activa, Aviator), Hero MotoCorp (Pleasure, Maestro), India Yamaha Motor (Ray, Ray Z) have made good of the market's predilection for scooters.

TVS' latest, the Jupiter, follows scooters for men from Hero and Yamaha that launched the Maestro and the Ray Z respectively. Two different modes of eco and power will optimise fuel efficiency for riders of the scooter.

TVS found that men comprise 36 per cent of scooter riders. Women constitute 29 per cent and 35 per cent of the scooters sold are used by both. Jupiter is the third after TVS' Scooty Pep Plus for women and the unisex Wego. Priced at Rs 44,200 (ex-showroom, New Delhi), it is Rs 3,000 less than Honda's bestseller, the Activa.

TVS, which gets 25 per cent of its two-wheeler volume from scooters, slid from the second-largest scooter player to the third, with Hero and Yamaha chipping away at its share.

The company lost around 500 basis points in fiscal 2013 to new entrants, says Yaresh Kothari, an automobile analyst with Angel Broking. "The new scooter launch will certainly help the company to gain market share," he adds.

Kothari notes that the motorcycle segment is crowded, so it makes sense for the company to focus on scooters. TVS had tried a comeback after three years with the launch of the 125-cc bike Phoenix on a new platform in 2012. But another analyst who has tracked TVS for over a decade points out that it fell short of expectations in motorcycles. Going forward, analysts have been sober with their forecasts for its growth in bikes, some even predicting a fall in volume. .

But TVS is betting on the new launches. The company hopes to prop up its scooter share from last year's 13-13.5 per cent to 16 per cent or more with Jupiter. At present, TVS sells about 15,000 units of the Wego and 21,000-22,000 units of the Scooty every month. With the Jupiter, the company hopes that it can sell around 45,000 scooters a month by December.

By January, 2014, it would have launched another scooter called the Zest. The motorbike Star City will beef up its portfolio further. "With the new Scooty Zest, we see an opportunity to clock 50,000 units a month in the first quarter of the calendar year 2014," says K N Radhakrishnan, the president.

Analysts note that the company has been working on a common engine for a bike and a scooter for two years and believe the January launch could well showcase it.

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