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With CNG bikes TVS hopes to ride out the blues

Monday, 14 January 2008 - 4:15am IST

TVS Motor Company, which has seen the steepest sales decline in two-wheeler sales all through this fiscal, is banking on revolutionary technology.

NEW DELHI: TVS Motor Company, which has seen the steepest sales decline in two-wheeler sales all through this fiscal, is banking on revolutionary technology and new products to achieve turnaround.

While competitors Hero Group and Bajaj Auto are foraying into four-wheelers to beat bike degrowth blues, the Chennai firm has chosen to bike on innovation.

TVS is developing a bike that runs on compressed natural gas (CNG), a fuel-injection variant of the 160 cc Apache RTR, and a hybrid scooter besides liquefied petroleum gas (LPG) and CNG variants of three-wheelers.

Venu Srinivasan, chairman & managing director, TVS, says it would be a 125 cc vehicle but would have the power of a 100cc one.

“CNG has a very significant expense in the form of fuel tank since it is stored at very high temperatures…..I don’t know of any other CNG bike in the world, so this could be an industry first……while the acquisition cost of such a bike would be higher than a comparable petrol vehicle, its running cost may be up to 40% lower,” he said.

Rival Bajaj Auto had announced plans for dual-fuel bikes (petrol and CNG/LPG) early in April 2007, and had then said it hopes to launch it “in the next 12 months”.

Bajaj hasn’t announced what progress has been made on this in recent times. This TVS bike would be test marketed in Delhi and Gujarat by the last quarter of 2008.

Also on the anvil is an electric scooter besides an upgrade of the entry-level bike Star City. Srinivasan says that the company will close this fiscal with sales of Rs 3,700 crore and a marginal Rs 160 crore loss, but is looking to more than make up in 2008-09.

Over the next three years, TVS is planning to double production to touch the four million vehicle mark. Many of its new products have the potential to be pioneering moves in the Indian two-wheeler arena, but till such time they are under development, TVS continues to bleed: sales are set to decline by one lakh units at 1.4 million units in this fiscal.

“There has been a slump in the two-wheeler market due to lack of availability of vehicle financing, specially in the B and C-segment towns. We have been hit hard because of our major play in the entry level —- the 100 cc bike segment —- and the absence of a product in the 125 cc category till now,” Srinivasan said.

The company is hoping for a turnaround in the March quarter itself, when the controversial 125 cc ‘Flame’ begins selling.

Flame is the bike over which TVS and Bajaj are feuding, but Srinivasan expresses confidence that the case would be decided in his company’s favour.

Bajaj has accused TVS of patent infringement, seeking a stay on the dispatch of Flame but TVS has denied the allegations.

“We believe we have a strong case, Bajaj has made baseless allegations on a patent that should not have been granted in the first place.”

TVS plans to sell over 40,000 units of the Flame in the March quarter.


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