TVS arm to drive into car accessories biz

Written by Corporate Bureau | New Delhi | Updated: Jun 5 2009, 04:52am hrs
Eyeing over 100% growth in the car accessory market in India in next two-three years, Lucas Indian Services, part of the $5-billion TVS Group, has forayed into the organised car accessories retail market and has lined up Rs 180 crore investment in the country in the next five years.

We will invest Rs 180 crore to set up 108 stores in 32 cities in India over the next five years, starting with Gurgaon, followed by Mumbai and Ludhiana in September, says Arun Lamba, president, Carplus, the retail chain that will offer multiple brands of accessories.

According to Lamba, the company has started with private labels and has tied up with 50 leading brands for the same but eventually they might consider selling products under its own brand.

Since penetration is low in India and people have high aspirations and higher spending power, Lamba feels there is a huge growth opportunity, both from the new car and the used car segment. The Indian car accessory market is estimated at Rs 4,200 crore and this is expected to double in next two-three years, he says.

Lucas Indian Services is planning to get a huge chunk of its business from cars in B and C segments, which is the fastest growing segment and includes hatchbacks and entry as well as mid size sedans while a small part of it will also cater to the entry level cars like Nano and Maruti 800.

According to Sandeep Abbi, president of Lucas Indian Services, the company is eyeing a turnover of Rs 560 to Rs 600 crore from the Carplus venture in next five years. However, a Mumbai-based analyst says the dwindling demand for two-wheelers, the core business of the Chennai-based TVS group, has forced the company to diversify into new ventures. According to Siam, sales of TVS Motors declined by 1.36% in 2008-09 at 11,36,344 units as against the two-wheeler industry growth of 2.6% at 74,37,670 units.

Lucas Indian Service is a specialist organisation in aftermarket sales and service of Lucas-TVS Auto Electricals and Delphi-TVS Diesel Fuel Injection Equipment. The company had a turnover of Rs 190 crore in 2008-09 and is eyeing 15-20% growth in 2009-10.