Mumbai: TVS Motor Co. Ltd, India’s third largest motorcycle maker, plans to boost exports 47% this fiscal year as higher loan rates and a slowing economy cause domestic demand to drop.
The company aims to export 200,000 motorcycles and scooters in the year ending March, H.S. Goindi, head of sales for the Chennai-based company, said in a phone interview on Thursday. Industrywide motorcycle sales will fall by as much as 10% in the next six months, he said, while declining to give a company-specific forecast.
Exports as a ratio of total sales will more than double to 35% in the next two years as the company increases shipments to about 50 countries in Asia, Africa and Latin America, Goindi said. A 21% decline this year in the rupee against the dollar will also help the repatriated value of TVS Motor’s overseas sales.
“Exports will help in the short term as the domestic market is saturated,” said Vaishali Jajoo, an analyst at Angel Broking Ltd. “Companies need to look at export opportunities in developing markets.” Jajoo rates TVS Motor “neutral”.
Motorcycle sales in India, the world’s second largest two-wheeler market, fell in the year ended 31 March, the first decline in at least six years, according to the Society of Indian Automobile Manufacturers. Industrywide sales fell 15% in October, while TVS’ sales declined 16%.
“There is a downturn in the economy, and everybody is hearing bad news,” Goindi said. “There is a bit of scare, so sales are bound to be down.”
Indian banks now charge 22% for two-wheeler loans compared with about 16% two years ago, Jajoo said.
Prime Minister Manmohan Singh said on 15 November that the global economic slowdown would cause India’s growth to slow to between 7% and 7.5% in the year to 31 March, from an average of about 9% in the previous four years. TVS Motor, last year, opened its first overseas factory in Indonesia, South-East Asia’s largest economy.
TVS Motor exported 108,556 motorcycles and scooters between April and October, 48% more than a year earlier. The motorcycle maker expects exports to rise 30% each year in the next two years, Goindi said.
India’s rupee slid to a record low against the dollar on Thursday as a rout in global equities added to speculation investors will increase sales of riskier emerging market assets amid a recession.