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TVS plans power bikes to take on rivals

TVS plans power bikes to take on rivals

Author | Source: Business Standard | Wednesday, Jun 11,2008 8:07 AM

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TVS plans power bikes to take on rivals

TVS Motors, India's third largest two-wheeler maker, is developing premium motorcycles to take on the likes of Hero Honda Motors and Bajaj Auto, and boost its sagging sales.

The Chennai-based company is developing bikes in the range of 200cc and above to compete with Bajaj Auto's Pulsar range, which begins with the 150cc variant and ends with the 220cc model at the top of the ranks, sources, who declined to be identified, said.

Confirming the development, HS Goindi, senior vice-president (international sales), TVS Motors, said: "As a company strategy, we look to develop new models for different segments. We will definitely look to get into the premium segment (180cc and above).

We have planned some launches later in the year and some can happen in the premium segment." Sales of high power motorcycles have risen in India helped by increased demand from the younger section of the population. More than half of India's 1.1 billion population is below the age of 25 years, according to a United Nations survey. The average age of Indians by 2020 is expected to be around 29 years with China (37 years) and Japan (48) trailing.

Demand in the segment has also risen due to improving infrastructure, including expressways. Sales of Bajaj Auto's Avenger, Pulsar, Hero Honda's Karizma and Royal Enfiled's Bullet, Thuderbird and Machismo models have grown by more than 30 per cent in the past one year.

Sales of two-wheelers above 125cc up to 250cc capacity grew by 14 per cent.

TVS Motors' sales during the last year dropped by about 20 per cent. The drop was mainly seen in the entry level (100cc) and executive (125cc) motorcycle segments while growth in the scooter segment was flat. The company maintains that demand for the Apache model is quite buoyant.

TVS Motors worked with Italian two-wheeler design firm Engines Engineering SpA for a range of premium bikes before the alliance ended about eight months ago. It reportedly produced two premium models for the company.

The Italian company, which helped superbike makers Ducati and Yamaha, among others, to produce high-end complex machines, was recently bought by Mahindra & Mahindra.

Goindi, however, declined to comment on the models developed by the Italian firm. Meanwhile, the company will also offer an upgraded model of Apache RTR (160cc) every six months to keep customer excitement at high levels. The company is launching a fuel injected Apache variant this month, which will be followed by another variant in December.

"TVS Motors is planning models in the premium segment as the demand is rising and also due to better margins. As the Indian two-wheeler buyer moves up the value chain, the demand for 180cc-plus bikes in India is gaining momentum. The company saw a drastic drop in sales last year due to loss in excitement for its offerings," said a city-based auto analyst.

The market share of the entry level (upto 100cc) segment, which constituted 73 per cent of India's bike industry, dropped by 19 per cent last last year. It's share stood at 79 per cent the year before that. Arch-rival Bajaj Auto has already said that it will not introduce any new models in the 100cc segment where it sells the Platina. Hero Honda, the leader in the entry level segment, has a market share of 70 per cent.

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