TVS Motor Company plans to bring down the number of components in two-wheelers significantly to reduce costs and improve profitability.
“Over the next three years, we will simplify the number of parts. We expect to reduce part count by 40 per cent. We currently have multiple platforms across our two-wheelers. We plan to bring that down to 2-3 common platforms,” said Venu Srinivasan, Chairman, at the company's AGM.
Platform refers to the core frame and engine over which vehicles are built. A common platform ensures the basic interiors and fixtures remain the same; the exteriors alone will change. "This will reduce fixed costs, improve profitability, durability and quality.”
When the part count comes down, suppliers will consolidate, said K.N. Radhakrishnan, CEO of the company.
The first quarter profits of the company took a 13 per cent hit at Rs 51 crore. TVS Motor’s market position has dropped from third to fourth place.
Motorcycle business
“The company has had some issues, particularly in motorcycle business. We have had to compete with the number 1 and 2 players on dealerships, geographies and models. All this has put pressure on costs and margins. But we will strengthen our position in the next 18 months with a series of launches in motorcycles and scooters,” Srinivasan said.
“We will have a new product every quarter.”
Executive motorcycle
TVS Motor Company plans to launch TVS Phoenix, a 125 cc executive motorcycle, on September 28.
“We have been absent in the executive category which has the likes of Passion and Shine. Phoenix will significantly change the position of TVS in this segment,’’ the Chairman said.
The next 18 months will see a series of new launches in both motorcycles and scooters, backed by the R&D team, he said.
“The company plans to grow through the new launches.’’
Srinivasan expects the two-wheeler industry to grow in very low single-digit during the rest of the year, given the global uncertainty and economic slowdown in India. “Uncertainty will continue to haunt the motor industry. Exports have also declined.’’
Domestic demand for three-wheelers is slow; but “we expect significant improvement in exports,’’ Srinivasan said.
The company hopes its Indonesian arm will achieve cash breakeven by the end of this fiscal; “this will help improve our bottomline,’’ he said.
Sudarshan Venu appointed Vice-Presdient
TVS Motor has appointed Sudarshan Venu, son of Venu Srinivasan, as Vice-President of the company, effective December 1, 2011.
Last year, Sudarshan Venu was inducted into the board of group company Sundaram Clayton Ltd, as additional director. His sister, Lakshmi Srinivasan, is also on Sundaram Clayton board; she is the Vice-President (global business development and strategy) at SCL.
