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How TVS plans to take on Hero, Honda, Bajaj and Mahindra

Last updated on: May 07, 2014 20:24 IST

How TVS plans to take on Hero, Honda, Bajaj and Mahindra

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Gireesh Babu

A slew of new products in the mid-segment line-up like Star City Plus and Victor, an agreement with global brand BMW to launch new range of bikes and a strong marketing push is what the Chennai-based automaker has up its sleeves to take on established players in the two-wheeler market.

TVS Motor Company (TVS) has not given up on the motorcycle segment yet. It trailed the erstwhile Hero Honda and Bajaj Auto (Bajaj) as a distant third for years.

It then suffered when the tie-up between Hero MotoCorp (Hero) and Honda gave way as the newly separated player, Honda Motorcycle and Scooter India (Honda), usurped it as the third-largest seller in 2011, on its way to compete neck and neck with Bajaj.

But the comeback hopes of TVS chairman and managing director, Venu Srinivasan, is evident from its designs on the motorcycle segment.

It has launched a new commuter bike, TVS Star City Plus on Monday. And soon, it would be launching a new bike branded as its erstwhile bestseller TVS Victor.

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Image: TVS Star City Plus
Photographs: tvsstarcityplus.com

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In a market which is seeing slowing growth, TVS has suffered from the lack of new products, marketing gusto that fizzles out after the launch phase, lop-sided portfolio (low on products in the fast-growing segment of 125-cc bikes, while pushing the Apache which is 150-cc, a segment that requires strong branding).

At the launch of the latest bike, Srinivasan says, "In the commuter segment, we have been largely absent except in the lower-end where we have TVS Sport and a little bit at the higher-end with TVS Phoenix. We need to be a larger player in the middle. This segment accounts for around 595,000 vehicles a month. But the new Star City Plus and the new Victor and Phoenix, should help us get a bigger share in motorcycles."

"The launch of TVS Star City Plus is an important one for TVS," says Yaresh Kothari, auto analyst at Angel Broking. "If it is a success, the model would help the company grab more market share," he adds.

According to market estimates, in overall two-wheeler market, Hero has 41 per cent share, Honda and Bajaj have 24 per cent, while TVS has a little above 12 per cent share in 2013-14.

Of late, its 110-cc bike Jive, a clutchless bike, Flame, and the Wego, a scooter have not propped up its fortunes much.

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Image: TVS Star City Plus
Photographs: tvsstarcityplus.com

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It has done relatively better with its last scooter launch, the Jupiter, which has led its incremental sales gain this quarter.

Srinivasan says, "So far, our focus has been on scooters, Wego and Jupiter. The launch of the Scooty Zest next month would complete the range of offerings in the scooter segment. We would now focus on the motorcycle segment with new launches."

TVS also seems to be taking the experts' qualms about its marketing efforts seriously.

The Star City Plus has an Ecothrust engine, geared for city-ride, offering fuel economy of 86 kmpl.

Indian cricket-team captain Mahindra Singh Dhoni will endorse the TVS Star City Plus in new ads.

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Image: TVS Star City Plus
Photographs: tvsstarcityplus.com

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The company would be focusing on increasing the awareness on its features to increase the brand image. "We have a good customer base of 4.5 million customers for the Star City and the new product is an updated version to attract them, along with the new customers in the market," Srinivasan says.

The company expects to start selling around 15,000 units of the Star City Plus a month.

The product will replace the older Star City and be available at an ex-showroom (Delhi) price of Rs 44,000 by the end of this month. It would go up against the Honda Dream Yuga, Mahindra Centuro, Hero Splendor and Bajaj Discover, the last two some of the most popular models.

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Image: Mahindra Centuro
Photographs: mahindracenturo.com

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The new TVS Victor would soon follow in the next three-four months: "We will have the TVS Victor at a slightly higher level," says Srinivasan.

TVS sells around 30,000-35,000 bikes a month in the 110-cc segment. With the new bikes, it expects to cross 60,000 a month.

On the cost of ownership of the brand, K N Radhakrishnan, president and CEO of TVS Motor says that the cost of ownership for TVS Star City Plus would be around 5 per cent cheaper in comparison. With the new product launches, the total market share of the company is expected to grow from over 12 per cent of the total two wheeler market to around 14.5 per cent during the current year.

Another major venture of the TVS Motor, the agreement with global brand BMW to manufacture new range of bikes, is also going as per the schedule, says Srinivasan. "It is a work under progress and it is a brand new platform for BMW, and therefore, it is designed from scratch. That is the kind of time we are going to put in the product," he says.


Image: TVS Victor
Photographs: tvsmotor.in

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