The Hindu : TVS Motor's Rs. 200 cr. investment outlay

Online edition of India's National Newspaper
Tuesday, Apr 29, 2003

Business

Business

TVS Motor's Rs. 200 cr. investment outlay

By Our Staff Reporter

CHENNAI APRIL 28. Two-wheeler maker TVS Motor Company has decided to incur a capital expenditure of Rs. 200 crores annually over the next five years. The long-term objective is to ensure that the company gained a 25 per cent share in the Indian two-wheeler market, which is expected to grow to ten million by 2010. In the current year, the expenditure will essentially go for improving the R&D activities and also for launching a couple of new variants — one each of Fiero and Victor. Further, TVS Motor will be launching a new vehicle this year.

Addressing presspersons here today, Chairman and Managing Director of the company Venu Srinivasan said the entire Capex needs for the current year would come from internal accruals. Fielding a range of questions, he said his company had the capability to make 1.7 million vehicles a year.

The company would aim at a one per cent improvement in its market share this year in motorcycles. Last year, it held a share of 19 per cent. The company, he said, would sell 2.2 lakh mopeds this year against 2.5 lakh mopeds sold last year. He citied the drought situation in Tamil Nadu for this anticipated dip. Nonetheless, a 21 per cent growth in the scooter segment to 1.80 lakhs as compared to last year. The CMD said the company would review its proposed foray into Indonesia by September. To a query, he said the company was contemplating an assembling plant for step-through vehicles.

He said the company would ideally like to see 10 per cent of sales coming from international markets. The company, he said, was looking at markets like Iran, Bangladesh and Sri Lanka for exporting its two-wheelers. Asked about entering China, he said the Chinese authorities had put a ban on the use of two-wheelers in select cities. The company had to keep this fact in mind. In any case, he ruled out any China foray in the near-term. Mr. Venu Srinivasan said the company had planned to set up a three-wheeler production base at Nanjankode in Karnataka. But it awaited board's approval.

To a query, he said the company was keen on spreading its manufacturing locations so as to reduce risks. He asserted that TVS Motors had been making significant investments in Tamil Nadu. He said nearly Rs.115 crore investment in the Victor brand of vehicle alone that was coming out of the Hosur plant.

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