TVS Motor 100cc sales slip

Chennai, March 27 | Updated: Mar 28 2005, 05:30am hrs
TVS Motor Company (TVSMC), the third largest motorcycle manufacturer in the country, is at its wits end as its strategy to regain lost volumes and chart an ambitious growth path is not progressing as per the script.

Firstly, the 100cc offerings are not notching up the expected numbers. The sales of the company in the 100cc segment for the period April-February 2005 was at 4.85 lakh, as against 5.69 lakh in the same period, the previous year. This, despite the launch of four stroke TVS Star, the entry level 100cc model, first in North India and later in the southern markets.

It may be recalled that the absence of a model at the entry level of the popular segment had cost the company dear in terms of volumes as demand shot up for models that were priced at around Rs 30,000 levels. This, coupled with attractive campaign by competitors such as Bajaj and Hero Honda saw TVSMC lose almost a fourth of its volumes.

Launch of TVS Star priced attractively at around Rs 30,000 was expected to retrieve the lost volumes and regain market share. But according to market sources and analysts, it is not happening at the pace the company expected even though TVS Star has been received well in the market. The February 2005 sales in the 100cc segment (including Centra and Victor GX), at 43,863 units, is still significantly lower than 52,363 sold in February 2004.

What is of immediate concern to TVSMC, however, is the cannibalisation of the 110cc Victor GX sales by its pet product, the TVS Centra. The Centra was developed indigenously by the companys R&D wing. The patented VTi technology introduced in the Centra, reportedly saves on fuel significantly, making it a fuel efficient motorcycle. The vehicle has been selling well, but at the cost of 110cc Victor GX, according to analysts and various industry sources.

R Chandramouli, Vice President, Marketing & Sales, TVSMC, ruled out any cannibalisation by TVS Centre. He added that TVS Star would begin to show volumes from April, when the vehicle launch would be complete in states like Maharashtra, Kerala and Karnataka. The company is also positioning TVS Star as an upcountry variant and the TVS Star Deluxe, which has been launched in select markets, as an urban variant to notch up numbers.