Over the past 5-6 years, the company has been strongly focusing on quality in a bid to roll out zero-defect products benchmarked to Honda two wheelers. It was also leading in R&D spend among the Indian two-wheeler firms and has consistently increased focus on building new engine platforms. All these efforts are paying dividends. It is gaining market share in scooters, while its bike sales are also improving aided by new launches.
TVS Motor is now the third largest two-wheeler manufacturer in India with a market share of about 7 per cent in motorcycles and about 16 per cent in scooters. The company successfully ventured into the three-wheeler segment during 2008-09 and has garnered a market share of 11 per cent as on 31 March 2015. It also emerged the second largest exporter of two-wheelers in the country.
Scooters – volumes zoom
The company’s come back in scooter segment has been impressive. Though it was one of the earliest entrants into the automatic scooter market, after the Japanese auto major Honda led the new evolution of automatic scooters in India with the launch of its all metal body Activa 12 years ago, TVS was steadily losing market share for a few years till 2013-14. Competition also became intense with more and more companies rolling out new scooters.
With self-start option and ease in driving, these automatic scooters have been a big hit in India and are growing faster than motorcycles. This has been largely driven by new launches and positioning of these scooters as a gender-neutral vehicle. ie., there has been an increasing number of men buying these scooters but nowadays higher demand comes from working women and female college students.
After strengthening its R&D and improving quality standards further, TVS Motor’s new phase in scooter market began with the launch of its 110cc Jupiter in September 2013 to beat the segment leader Honda’s flagship product Activa.
The launch proved to be a turning point for the company. Jupiter has been the catalyst for TVS’ revival strategy in the two-wheeler market and it kick-started increased walk-ins into TVS showrooms, with many first-time TVS buyers enquiring about the automatic scooter brand.
A year later, the company rolled out another new model Scooty Zest 110 to strengthen its presence further in the scooter market. Success of Jupiter and Scooty Zest enabled the company gain market share and helped the company regain the Number Two position from Hero in the scooter market.
Motorcycles – challenges remain
TVS Motor Company’s new chapter in motorcycles began in September 2012 after it was caught in a legal tussle with Bajaj Auto over patent issues.
It introduced all new Phoenix, a feature-packed 125 cc motorcycle, built on a new platform. The new 125 cc bike was rolled out in an attempt to make its presence felt in the executive segment of the two-wheeler market then accounting for about 40 per cent of the motorcycle volumes. TVS was absent in this segment after the failure of TVS Centra, though it had initial success for some time. The next product Flame was caught in a legal battle with Bajaj.
However, Phoenix had some initial good response, but overall didn’t meet the expectations. Thus, its efforts to strengthen its presence in the executive segment didn’t take off well.
The company continued to boost its presence in the commuter segment with the all-new motorcycle, Star City+, at an aggressive price and high-mileage promise in May 2014. Star City+, built on new 110cc eco thrust engine and incorporated with many new features, created a lot of interest among the buyers.
StarCity+, which came in the low end category of the commuter bike segment, proved to be a successful model and lifted its overall market share. This upgraded bike variant had notable improvements in product quality and reliability.
Meanwhile, company’s 150-cc bike Apache, launched in 2006, has been quietly gaining momentum. With more youth coming into the bikes market, higher CC bikes (ie. above 150 cc) have become hot favourites. This segment continues to grow at double digit.
TVS Motor Company introduced two new bikes – 110cc Victor and 200cc Apache in January.
“We are introducing these two significant bikes that are designed to get us significantly higher market share in bikes. We have spent close to Rs.300 crore in developing the two products. Our products will meet global standards,” said Venu Srinivasan, Chairman, TVS Motor Company.
The new Victor is yet another attempt of TVS Motor to boost its position in the executive category that makes up about 54 per cent of commuter segment. Lower category of commuter segment is being served by TVS Sport and StartCity+.
The company also launched a new Apache RTR 200 4V, which incorporates a lot of new features, to woo college youth and first jobbers. The premium bike Apache is expected to bring some additional volumes in the segment. The existing TVS Apache model is the leader in its segment (above 150cc to 200cc) with about 40 per cent share.
“We expect at least three per cent increase in our market share to 10 per cent in motorcycles,” Srinivasan said.
With two new motorcycles, TVS Motor aims to increase its share in two-wheeler market to 14 per cent (from 12 per cent in 2014-15) by the end of this fiscal and to 16 per cent by next fiscal.
First bike from TVS-BMW tie-up this year
In April 2013, TVS Motor entered into a long term agreement with BMW’s motorcycle division, BMW Motorrad, to develop and produce a new range of motorcycles that will cater to the sub-500cc segment. BMW Motorrad doesn’t make sub-500cc bikes.
TVS has invested about 20 million euros in this venture. The joint venture is expected to roll out its first product later this year.
“The tie-up is expected to help TVS Motor expand its presence in the premium motorcycle space, where it currently offers the Apache (160cc and 180cc) series. In the near term, we believe that this agreement is unlikely to alter the current positioning of the company in the domestic motorcycle industry,” said Bharat Gianani, Senior Automobile Research Analyst at Angel Broking.
According to estimates, India is the third biggest market for above-250 cc bikes with annual volumes of over four lakh units. Europe and U.S. are the two biggest premium markets in the world with annual volumes of about 4.5 lakh units.
Meanwhile GenNext at TVS Motor Company is also playing decisive role in company’s growth plans. Nowadays, one could see Sudarshan Venu (27), son of Venu Srinivasan, actively discussing two-wheeler market and features of company’s new product line up.
In a recent launch event, he expressed confidence over company’s launch plans and indicated that TVS Motor would strengthen its position across categories.
The company reported a healthy volume growth of seven per cent for the third quarter ended 31 December 2015, aided by the scooters and bikes that grew by 22 per cent and 11 per cent respectively.
With new launches fetching good volumes and market share gains, TVS Motor Company’s quest for strong play in the two wheeler market seems to be on a strong footing.