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TVS plans high-capacity gearless scooter launch

TVS plans high-capacity gearless scooter launch
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First Published: Tue, Jul 28 2009. 10 10 PM IST

Shifting gears: President of marketing at TVS Motor H.S. Goindi says the company will launch the new scooter around Diwali. Hemant Mishra / Mint
Shifting gears: President of marketing at TVS Motor H.S. Goindi says the company will launch the new scooter around Diwali. Hemant Mishra / Mint
Updated: Tue, Jul 28 2009. 10 10 PM IST
Mumbai: India’s third largest two-wheeler maker, TVS Motor Co. Ltd, is set to launch a high-capacity gearless scooter in the next three months as it looks to take on its rivals in newer segments.
Shifting gears: President of marketing at TVS Motor H.S. Goindi says the company will launch the new scooter around Diwali. Hemant Mishra / Mint
TVS Motor has restricted itself to smaller gearless scooters with engine capacity of less than 100cc displacement, targeted primarily at women and lower income groups. Scooters account for 15% of the 7.4 million a year two-wheeler market in the country, dominated by gearless models.
The Chennai-based company will launch the new scooter around the Hindu festival of Diwali in October, said H.S. Goindi, president of marketing at TVS Motor. This is the first time TVS will be offering a “big” scooter, he said.
Goindi refused to comment on the positioning, branding or expected sales volume from the new model, only saying, “It will help us strengthen our scooter portfolio further.”
TVS sells the Scooty Pep+, Streak and Teenz brands in the sub-100cc scooter segment, in addition to its motorcycles, including Flame and Apache.
In the three months to 30 June, the company sold 315,785 two-wheelers in India, an 8.1% rise compared with the year ago period.
Scooters contributed 65,169 units, up 8.7% over the year ago period.
An analyst said it makes sense for TVS to move to a higher capacity bracket in the scooter segment as the market for sub-100cc models in India is contracting.
“(But) one has to see if they (TVS) are able to break into Honda’s dominance and the new product can give a run to the competition, the way its motorcycle Apache did,” said Chetan Vohra, an analyst at Bric Securities Ltd.
TVS’s larger rival Honda Motorcycle and Scooter India Pvt. Ltd, the India arm of Japan’s Honda Motor Co., sells at least half of the scooters sold in India, with all its models in the 100cc-plus segment.
Honda Motorcycle commanded 57.11% of India’s scooter market in 2008-09, while TVS Motor has a 20.94% share, according to the Society of Indian Automobile Manufacturers (Siam).
Credit Analysis and Research Ltd, or CARE, says in a June report on the Indian two-wheeler industry that the country’s scooter segment grew at a compounded annual growth rate (CAGR) of 5.3% between 2003-04 and 2008-09. This was driven by scooters with engine capacity of 75-125cc, which posted a CAGR of 20%.
In sharp contrast, scooters with engine capacity of less than 75cc declined 37.6% in this period, while that of models in the 125-250cc range fell 28.6%.
CARE attributed the decline in the sub-100cc segment to customer preference for higher capacity scooters and motorcylces.
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First Published: Tue, Jul 28 2009. 10 10 PM IST