MUMBAI: TVS Motor Company Ltd has laid out a strategy to boost its export volumes over the next 3-5 years, a senior company executive said. This move is aimed at consolidating the two-wheeler maker's presence overseas.
“Over the next 3-5 years, our focus will be to improve the export volumes. We plan to consolidate our export business across Africa and Latin America. We also plan to grow export shipments from our Indonesia-based unit in the coming years," Sudarshan Venu, joint managing director TVS Motor Co said during the company’s annual general meeting.
Venu is known for driving the company’s presence in the international markets across Asean, Africa and Latin America.
In February, the company had signed a deal with Honduras-based Motomundo SA, a local distributor appointed for sales and service of TVS vehicles while expanding business in Central America.
TVS Motor had also signed up more distributors last year including the appointment of a distributor named Al Yousuf MC in the United Arab Emirates, and Cadisa Group in Guatemala and El Salvador.
The company’s export volumes, along with the domestic dispatches, remained subdued during the June quarter as a result of the Covid-19 lead disruptions. It exported 69,544 two-wheelers, down 60% year-on-year (y-o-y), and 10,926 three-wheelers, down 70% y-o-y, in Q1FY21.
It’s domestic volumes were at 185,884 two-wheelers, down 74% y-o-y, and 579 three-wheelers, down 79% y-o-y, in India during the June quarter.
The maker of Apache motorcycles and Jupiter scooters, however, had reported robust growth in its export shipments during FY20. It exported a total of 6.79 lakh two-wheelers during the last fiscal, up 9.2% y-o-y, as against the industry average of 7.3% y-o-y growth in FY20.
It had also exported 1.62 lakh three-wheelers in FY20 thereby recording a growth of 16% y-o-y as against a 12% y-o-y volume drop in the overall three-wheeler exports last fiscal.
While addressing a shareholder’s query on growing export volumes, Venu said the Indonesia-based subsidiary is critical for the plan of consolidating the company’s global presence.
According to the company’s annual report, TVS Motor’s Indonesian subsidiary sold 53,650 units of two-wheelers in FY20, growing 31% y-o-y from 40,760 units in FY19. The growth in sales also helped it record positive earnings before interest, taxes, depreciation and amortization or Ebidta of $750,000 during FY20 as against net loss of $3.04 million in FY19.
The company has a long-term strategic partnership with Germany’s BMW Motorrad to develop and manufacture sub-500cc motorcycles for India and global markets. It has produced more than 72,000 bikes under the alliance so far.
TVS Motor also acquired UK’s Norton Motorcycles in April for £16 million with an aim to enhance its global presence with the premium product portfolio.
“The company also believes that Norton Motorcycles can leverage its additional geographical network reach and global supply chain capabilities to expand to new markets and audiences with existing and upcoming products," TVS Motor said in its FY20 annual report.