TVS Motor Reports Revenues II

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The decline in motorcycle sales was mainly due to stringent norms followed by retail financiers and high rates of interest. Furthermore, festival season this year is delayed to October / November and hence placement of stocks with the dealers for the festival season is likely in Q3.

In addition, high costs of raw materials impacted the margins of the company substantially. The cost of raw materials during the quarter was 74.6 % of the revenue compared to 73.2 % of the revenue recorded in the same period last year. Focused efforts through value engineering and process improvement have partially neutralized the input cost increase.

During the second quarter, TVS Motor Company executed what could be termed as the biggest ever rollout in Indian automotive history. The company rolled out as many as seven products from its plants at Hosur and Mysore, in line with the commitment for the current fiscal. The seven products included the much awaited 3-wheeler in 3 variants, the new TVS Scooty Teenz EV, the upgraded 110 cc TVS StaR City, the new 125 cc FLAME and the new Apache 160 cc EFI. These products, backed by the highest quality standards of the TVS group are targeted at different segments of the two and three wheeler customers with emphasis on superior technology, styling and engine capabilities. These vehicles will enrich the company"s product portfolio and will provide further impetus to the growth of Motorcycle and Scooter sales in the coming months.

The company is also looking at overcoming the slowdown in motorcycle segment through a slew of strategic brand initiatives. While the company"s current motorcycle portfolio comprises largely of the retail finance dependent entry level, new product launches planned for the third quarter straddling different motorcycle segments will provide more options for customers and help the company to leverage a larger product range in future.

Towards end of September 2007, the company launched an upgrade of StaR City, a 110 cc motorcycle with 8.2 bhp. The 110cc StaR City comes with the revolutionary CVTi technology, which facilitates superior pickup and boosts performance without compromising on mileage. In addition to this, TVS has applied its VTi technology consisting of deceleration fuel cut off and significantly reduced friction. This innovative combination is what makes it one of the most fuel-efficient motorcycles in the country. This high performance motorcycle offers customers the comforts of an executive segment motorcycle at entry level pricing. The bike has received favourable response, both from the market and experts from leading automobile magazines.