TVS to take on Chinese brands in LatAm, Africa

Backed by its strong R&D and right product range, two-wheeler maker TVS Motor Company vows to penetrate faster into several export markets, particularly developing nations where the two-wheeler industry is dominated by Chinese and Japanese brands.

With its Indonesian experience, the company is confident of achieving faster growth in other export markets. TVS claims to have learnt a lot about quality from the Indonesian market, where it is struggling hard to increase sales of its two wheelers amid stiff competition from Japanese brands.

“Unlike other developing nations, Indonesian market is unique. With a strong focus on quality — be it in two wheelers or commercial vehicles or cars, Japanese brands have major chunk of share in the auto market there. In two wheelers, about 98 per cent of the Indonesian market is Japanese. Thus, it takes a little longer time for the customers to shift to other brands,” said KN Radhakrishnan, president and chief executive, TVS Motor.

However, with over 50,000 customer base in Indonesia, TVS’ Indonesian arm PT.TVS Motor Company Indonesia has been increasing its two wheeler sales over the past 15 months. The Indonesian subsidiary has reported 23 per cent growth in sales at 7,000 units during the Q1 of this fiscal. “The encouraging news for us is that all the models we launched there are doing well. We are now looking at some restructuring and regional launches to boost sales,” he added.

With increasing sales and proposed restructuring, the PT.TVS is expected to achieve cash break-even next fiscal. During 2010-11, the Indonesian arm reduced its operating losses to about Rs 40 crore when compared with Rs 64 crore in the previous year.

Meanwhile, TVS Motor is gearing up to strengthen its presence in the markets it has recently entered, while contemplating entering into more markets in African and Latin American regions. The company has launched its three-wheelers in Egypt and two-wheelers in Columbia, while it is in the process of launching its two-wheelers in Argentina soon. “Most of these markets are dominated by Chinese brands and we are able to penetrate faster in markets where Chinese brands are present,” said Radhakrishnan

TVS Motor’s increasing focus on exports comes close on the heels of tapping huge opportunity in the global two-wheeler market, which registered total sales of 50 million last year and has been growing at 10-15 per cent.