Firm looks to expand presence in Laos, Columbia, Argentina, Peru
The tilt in two-wheeler sales in favour of scooters in the Indonesian market spells more challenges for the Indian two-wheeler maker TVS Motor Company. The Indonesian arm of the company reported loss for the financial year 2011-12, raising more questions to grow its business in the world’s third largest two-wheeler market.
The Indonesian motorcycle industry has been growing at 15 per cent in the past five years and is expected to grow at 10-12 per cent over the next five. However, there has been a significant shift in the form of vehicles sold.
The popular Bebeks (step-thru bikes) category, which constituted close to 80 per cent of the market five years back has now come down to 40 per cent, on the back of strong growth from the scooters (skubeck) category. The scooters offer greater convenience and imagery over the Bebeks and hence are a preferred choice. The category share of sports model, however, remains stable at eight per cent, according to company’s latest annual report.
Company’s Indonesian arm PT TVS Motor Company Indonesia offers three brands in the Bebek category and one brand in the sports category and is still un-represented in the scooters category. All the product brands have been well received by the customers, it added.
PT.TVS Motor Company Indonesia (PT TVS) ended the financial year 2011-12, with 16 per cent growth in total sales at 23,000 units. Revenues of the company crossed Rs 100 crore and stood at Rs 107.36 crore in 2011-12 as against Rs 85.36 crore in the previous year. Operating loss at Ebitda level was lower at Rs 49 crore when compared to loss at Ebitda level (excluding amortisation of foreign currency monetary translation reserve) was Rs 58.4 crore in 2010-11.
During the ongoing financial year, the company intends to launch more products and ramp up the dealer network to boost its market share in the country. After the launch of all new step-thru bike TVS RockZ in May this year, it will also launch new variant of its bike Apache this year.
It has decided to focus on six identified provinces and increase its share in these markets through focused expansion and improving the productivity of existing dealers. The present strength of around 110 dealers will be increased to 240 by end of next year.
The Indonesian arm also exported 10,000 units to countries like Iran, Philippines and West Africa last year. It plans to expand its presence in new markets like Laos, Columbia, Argentina, Peru, Guatemala, Nigeria, Brazil and Vietnam.
During the first seven months of this calendar year, the two-wheeler sales stood at 4.3 million units in Indonesia. In 2011, total two-wheeler sales stood at 80,43,535 units in 2011 as against 73,98,644 units in 2010. Honda was the market leader with 53 per cent share, followed by Yamaha at 39 per cent share, Suzuki at six per cent and Kawasaki at 1.25 per cent, according to Indonesian Motorcycle Industry Association.
