TVS’s Indonesian arm reduces loss on buoyant sales

With increasing sales of its two wheelers, TVS Motor Company’s Indonesian subsidiary has significantly reduced its losses in financial year 2010-11. The subsidiary hopes for a stronger performance during the current financial year with expanded reach both in Indonesia and markets outside that country.

The Indonesian arm, PT.TVS Motor Company increased its turnover to Rs 85 crore in 2010-11 from Rs 68 crore in the previous year on the back of 32 per cent growth in two wheeler sales. It sold around 20,000 units compared to around 15,000 sold in the earlier year.

With increased margin and cost control measures, the company reduced its operating loss level to Rs 39.84 crore, from Rs 64.23 crore in the previous year, according to latest annual report of TVS Motor Company
PT.TVS ramped up its dealer network and has about 160 dealerships across 16 provinces in the country. It has sold over 50,000 two wheelers in Indonesia so far. In 2010-11, the subsidiary launched new re-styled versions of TVS Neo and TVS RockZ, besides a double disc version of Apache to boost sales. PT.TVS also offers lending through tie-ups with financial institutions in Indonesia.

In the fiscal that ended on March 31, 2011, TVS Motor Company made an additional investment about Rs 60 crore in PT.TVS.

During the first quarter of the current financial year 2011-12, the company’s sales stood at about 7,000 units when compared with 5,700 units in the Q1 of previous fiscal. The company bets on its new 150 cc hi-technology bebek TVS Tormax motorcycle, which was launched in May 2011, for additional sales in the coming months.

The subsidiary will target markets outside Indonesia and will also increase its presence in more provinces, thereby increasing its network to 240 outlets by March 2012. In the previous fiscal, it exported about 4,700 units to various countries.
With improved sales network and product portfolio, PT.TVS is expected to end the fiscal 2011-12 with much better performance.