TVS Motor Company Ltd will soon start shipping 310cc BMW bikes out of India, reaching a high point in its joint venture with the Germany auto major for making high-powered motorcycles in India.
According to a company spokesperson, TVS Motor Company would invest around Rs 350 crore in FY 2017-18 towards expansion of capacity, and aims to launch a new scooter and a motorcycle in the fiscal.
In 2013, TVS Motor and BMW signed an agreement to jointly develop motorcycles in the 250-500cc range to be sold through their respective distribution network. The 310cc motorcycle and its engine were developed jointly with BMW on a common platform.
TVS Motor president and CEO KN Radhakrishnan stopped short of revealing any details on volumes of manufacturing or exports of the superbike, saying it is up to the German auto major to talk about the numbers.
Speaking to a group of journalists who visited the company’s Hosur plant on Tuesday, Radhakrishnan said TVS Motor is yet to decide on the distribution model-separate network or sold through existing dealership - for its own 310cc bike Akula that would be launched next fiscal.
Radhakrishnan said the company has budgeted a capital expenditure of around Rs 350 crore next fiscal towards capacity expansion and other aspects. “The investment will be funded out of internal accrual,” he said.
According to him, the company has started rolling out BS-IV emission norm-compliant vehicles.
Radhakrishnan said the company will close the fiscal 2016-17 with a market share of around 14% as the sales scooters and motorcycles picking up. The company’s current market share in scooters is around 17% and in motorcycles around 8% in the Q3 of FY 2016-17.
He said the company’s revenue from spare parts sales is around 10 per cent.
Queried about the three wheeler market, Radhakrishnan said sales has dipped owing to various market factors, saying nearly 65% of the three wheeler produced are exported where the market has gone down.
On the company’s Indonesian venture, Radhakrishnan said the business is expected to breakeven next fiscal with losses halved this year to $3 million from around $6 million.