TVS Motor plans low-cost bikes

TVS Motor is scripting a new twist in the race to capture the12-million plus two-wheeler market. The company plans to introduce low-cost models across product segments. This would result in creation of a new segment within an existing segment.

“The work is on (for low-cost models) but I can’t share more details,” the company’s chairman Venu Srinivasan told FE.

Over the last one year, leading motorcycle makers have been developing cost-effective products, primarily, in the low-cost segment to rake in high numbers. The FE had reported in October that Mahindra & Mahindra has started preliminary work on developing a low-cost motorcycle which is going to be sub-100cc. Hero Honda Motors and Bajaj Auto are also weighing options to introduce a low-cost & high mileage bike.

TVS Motor is looking at international designs and new technologies for its product portfolio.

An auto analyst said the rankings in the two-wheeler market could see a major churn in the next few years.

“The approach that the two-wheeler makers adopt will determine who’s at the top. With uncertainty over the future of the alliance between the Hero Group and Honda Motors, Bajaj Auto and TVS Motor could be the companies to watch out for as far as innovation and product development is concerned,” he added. “The introduction of the Nano made us take notice (of producing low cost products)... it is possible to manufacture low cost products in the country,” Srinivasan said.

He said the low-cost model would thrive in the country because of the vast potential in rural areas. “Rural area sales will be important because people want to climb up the value chain,” he added. The company has no plans to introduce cars by leveraging technology that will be used for its low-cost bikes.

“The two-wheeler market is huge in India and we are going to focus solely on it.”

Currently, Bajaj Auto is the contract manufacturer for Renault-Nissan’s ultra- low-cost car that would take on Tata Nano. Srinivasan expects scooters to stage a comeback. He sees scooters’ share of the two-wheeler market to rise to 35% from 20% over five years .

TVS New Star Sport is among the cheapest bikes in the country. The ex-showroom price of this 100cc bike is Rs 32,000. In October, TVS Motors sold 1,95,271 units, 48% more than in October 2009. Bajaj Auto sales increase 32% to 3.3 lakh units.