TVS Motor to focus on rural market, entry-level segment

TVS Motor to focus on rural market, entry-level segment
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First Published: Mon, Jan 11 2010. 10 24 PM IST

Clear strategy: TVS Motor chief Venu Srinivasan says the money is at the bottom of the pyramid. Madhu Kapparath / Mint
Clear strategy: TVS Motor chief Venu Srinivasan says the money is at the bottom of the pyramid. Madhu Kapparath / Mint
Updated: Mon, Jan 11 2010. 10 24 PM IST
New Delhi: Scooter and motorcycle maker TVS Motor Co. Ltd is banking on new launches and a deeper penetration of the rural market to fuel growth in 2010, chairman and managing director Venu Srinivasan said in an interview. Edited excerpts:
Give me a sense of where you see the motorcycle business in 2010.
In 2010, we have two major launches: one is the scooter and the other is the motorcycle. So between these two vehicles, our target, including exports, is a 30% rise in sales. We would like to see sales of about two million vehicles in the next fiscal year, from 1.6 million this year.
Where would you like to position yourself next year? If you look at Hero Honda (Motors Ltd), they have consolidated their position in the commuter market. If you look at Bajaj (Auto Ltd), they have gone the sporty commuter way. What do you see TVS’ positioning as?
Clear strategy: TVS Motor chief Venu Srinivasan says the money is at the bottom of the pyramid. Madhu Kapparath / Mint
I think we will position ourselves in the below-100cc segment. 110 cc, I am counting as part of the 100cc segment.
We will look at the rural market very, very seriously. And we have two major niche segments where we operate—the Apache segment and the Scooty segment. We will consolidate in these areas. So we will take a niche strategy and not go with the broad brush against major competitors.
You talked about pushing the two new products strongly. But we did not hear you talk about pushing the Flame very strongly. Where do things currently stand? We haven’t got an update in terms of what the numbers look like as far as the Flame is concerned. (TVS in November announced the relaunch of the Flame after the Supreme Court allowed it to sell the motorcycle with twin-spark plug technology that had been the subject of a patent dispute with Bajaj Auto Ltd.)
Well, the Flame is selling a little less than 2,000 bikes a month, and we still haven’t put the twin-spark fully on it or extended any other products.
So, will we actually see you perhaps going slow as far as your Flame plans are concerned?
We will push it to 5,000 units.
Is it worth the trouble, though?
No, but I think there are customers...and we need to keep the product going and that’s a segment which will grow in the future. So I don’t think I am going to withdraw from that segment. We will continue to sell.
But that is not the focus area for you at this point in time.
Focus area has to be the entry-level segment. The bottom of the pyramid is where the money is.
Something else that we are seeing in the automotive business is consolidation. We have just seen one round of consolidation. I believe there could be a possibility of someone reaching out to you, perhaps even Yamaha (Corp.)... Is that true at all?
I don’t think so. I think consolidation in India at this point, in such a growing market, is unlikely.
But would you be open to something like that?
We will discuss with anybody who approaches us and I hope anybody will discuss with us if we approach them. But I think any strategic alliances at this point is far-fetched.
cnbctv18@livemint.com
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First Published: Mon, Jan 11 2010. 10 24 PM IST
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