V for Victor: TVS Motors reports highest sales ever

News about Mopeds

Moderators: ItsLookingUp, pehuskey, Tab, mountainmoped, JD, John

V for Victor: TVS Motors reports highest sales ever

Postby Micronaut » Sun Oct 29, 2006 2:42 pm

V for Victor
Friday October 27 2006 18:50 IST

Sushila Ravindranath
http://www.newindpress.com/sunday/sunda ... ry&rLink=0


One would think Venu Srinivasan, Chairman and Managing Director of TVS Motor Company, would be feeling somewhat relaxed. The two-wheeler manufacturer has had quite a year. Riding on the strong demand for its motorcycles, the company turned in its highest-ever sales performance in a single month in September. Motorcycles, for the first time, crossed the one lakh mark by recording sales of 106,972 units last month, compared to 75,310 bikes during the same period last year. There has been a growth of 42 percent. The overall two-wheelers sales of the company too saw a sharp increase and it actually broke its own earlier sales record. The growth has been a very healthy 34 percent. One might say the economy is booming, the entire two-wheeler industry is flourishing. However, TVS Motor has so far exceeded the industry growth since April this year and has been continuously increasing its market share in motorcycles and also in overall two-wheelers. The company also exported 38 percent more machines than it did last year.

It’s not just about numbers. The company has also come out tops in customer satisfaction surveys conducted by several auto magazines. It has emerged as the overall leader in the quality front. (Which it should, as quality has been an obsession with its chairman). It has won almost every quality award not only in India but internationally as well. TVS Motor is the only two-wheeler company in the world to get the Deming prize, which is considered the Nobel prize for quality. Srinivasan himself has been awarded the Quimpro Platinum Standard Award, which is given to highlight the quality achievement of extraordinary individuals in an era of global competition and global expectations. The other recipients include Narayanamurthy, Azim Premji, Aditya Birla, Suresh Krishna and Deepak Parekh.

So why is Srinivasan not resting on his laurels? “Only the paranoid survive,” he says, quoting former Intel chairman Andy Grove. “The market is changing so rapidly. Asia is also changing so fast. Constant vigil is the price you pay.” And he takes his competition very seriously. Today TVS Motor is the number three player, behind Hero Honda and Bajaj. “We aim to be a very good number two player, he says.

It has not been an easy ride for Srinivasan, who is the grandson of the legendary T V Sundaram Iyengar, the founder of the TVS group. He was in his twenties when he took over Sundaram Clayton, after his father’s death in 1979. The TVS group is a major manufacturer of automobile components. It had never ventured into consumer products. It was Srinivasan’s father TS Srinivasan’s brainchild to introduce the moped to the Indian market. And it fell on Venu’s young shoulders to bring it out into the market. He launched India’s first two-seater 50cc moped TVS 50 in 1980. The product was a runaway success. There was a three-month waiting period for it. (Remember those were the days of the regulated economy.)

In 1980, the government cautiously opened up the two-wheeler industry allowing foreign collaborations. Srinivasan had no option but to get into two-wheeler manufacturing when he was barely two years into the moped business. He went in for a collaboration with Suzuki, the famous Japanese collaborator of Maruti cars. Suzuki bikes were sturdy and were very popular in South East Asian countries. He set up TVS Suzuki (a joint venture between Sundaram Clayton and Suzuki) and the high point of Srinivasan’s career came in 1984, when he produced Ind Suzuki, India’s first 100cc Japanese collaboration two-wheeler. Srinivasan had opted for a two-stroke engine, which was considered trouble free and best suited for Indian road conditions. The company had a head start over the others and was on a roll for couple of years.

However when the competition entered the picture, TVS Suzuki crashed. Pitted against Hero Honda and Escorts Yamaha, sales dropped dramatically. From 8000 bikes a month, the figure fell to less than 2000 in 1988. The problem was that, at that point, the company never thought in terms of a downturn or competition. Two years after TVS Suzuki hit the road, Hero Honda made its appearance with its four-stroke engine. Its campaign “Fill it, Shut it, Forget it,” captured the country’s imagination like no other vehicle before. With the oil crisis, fuel efficiency was what the customers wanted. Escorts Yamaha with its more powerful engine and Bajaj Kawasaki (which quickly changed from two-stroke to four-stroke) also forged ahead.

Then there were labour problems, which resulted in a three-month lockout in 1990. But Srinivasan started fighting back. When you talk to him, you realise he is always open about his mistakes and is always ready to learn from them and learn new lessons as well. Says an influential captain of the automobile industry who has been observing Srinivasan’s progress from the beginning, “What I like about him is his ‘never say die’ attitude. Even during really bad times, he retains a sense of optimism. He has no doubts that he will emerge a winner.”

In 1991 a turnaround plan was put in place, and by 1995 the company was back in the reckoning, breaking all kinds of records. How did this happen? Srinivasan has always believed in investing in technology. Even when the company was down in the dumps, competitors had acknowledged it as a technically superior company. The company also turned to Prof RK Bhattacharya of University of Warwick, an expert in the field of manufacturing systems in engineering, to restructure the company. The company cut costs, overhauled its product image, revamped its marketing and did many conventional and unconventional things to literally rise from the ashes. Rigorous methods of quality were introduced. “We have to be the best in the class,” says Srinivasan.

What was particularly satisfying to Srinivasan and his team was that they did it on their own. Collaborator Suzuki did not help. Although Srinivasan has never come out and complained, relations between the two were quite strained for a long time. Whatever problems the company faced, the collaborator just stood and watched. Finally both parted ways in 2001. The company was rechristened TVS Motor. And it has done quite well as a true blue Indian company. The company has launched quite a few first-time products in the country, with or without Suzuki.

When things were going well, the company suddenly lost market share again between 2001 and 2003. “The sales of two-stroke bikes collapsed much faster than what we anticipated. We had no product at that point to replace these lower-end bikes. Centra was expensive. We had to redesign it,” explains Srinivasan. With TVS Victor, a four-stroke 125cc motorbike, the company had a winner. There are also Victor variants. “Victor and two-stroke machines were doing well. So we didn’t update Victor. We were concentrating on Centra,” says Srinivasan.

The company had to work on giving the same quality to its four-stroke machines as it did to its two-stroke ones. While it had a huge experience curve with two-stroke, it had to master four-stroke technology in record time. And remember there were no collaborators. “It is too expensive to get the vehicles designed abroad. We work with companies like Ricardo and AVL. But we have to be selective about what we take from them. We use the overseas expertise for fine-tuning,” says Srinivasan.

After two years of struggle, the company has gotten back on track again. TVS Motor’s credentials for quality are, of course, second to none. But now Srinivasan says that they realise that style is just as important. “We have to make the bikes attractive to younger people. Just solid engineering is not enough.” Now they have TVS Apache, a four-stroke 150cc high performance motorcycle, which has won many awards from leading auto magazines, TVS Scooty Pep, a four-stroke 90cc scooter, and TVS Star, a four-stroke, 100cc value-for-money bike.

Now that bikes like Victor have firmly established TVS Motor as an all-India company (it’s really not thought of any longer as a clunky, boring “South Indian” company) what next? “We have to work harder than ever,” laughs Srinivasan. With input costs going up constantly, Srinivasan recognises that huge numbers are necessary to maintain margins. He has a healthy respect for all his competitors. “Everybody is launching a good product. You just can’t rest. We now have to establish a global footprint,” he says. TVS Motor is putting up a plant in Indonesia. There is a joint venture in South Africa for assembly and distribution. Export markets — including South America — are widening. “There is a lot of work,” he says quite happily.

Did he ever think of giving it all up when he saw what he had built up come crumbling down on more than one occasion? “No. I never wanted to quit. The automotive business is a business of passion. Without that you cannot survive.”

Milestones

India’s first two-seater 50cc Moped TVS 50, launched in Aug 1980.

First Indian Company to introduce 100cc Indo-Japanese motorcycles in Sept 1984. Launched India’s first indigenous Scooterette (sub-100cc variomatic scooters), TVS Scooty in June 1994. Introduced India’s first catalytic converter enabled motorcycle, the 110cc Shogun in Dec 1996.

Launched India’s first 5-speed motorcycle, the Shaolin in Oct 1997. Launched TVS Fiero, India’s first 150cc, 4-stroke motorcycle in April 2000. Launched TVS Victor, 4-stroke 110cc motorcycle, in August 2001, India’s first fully indigenously designed and manufactured motorcycle. Launched TVS Centra in January 2004, a world-class 4-stroke 100cc motorcycle with the revolutionary VT-i Engines for best-in-class mileage. Launched TVS Star in Sept 2004, a 100cc motorcycle which is ideal for rough terrain.
You do not have the required permissions to view the files attached to this post.
Micronaut
Distinguished Rider
 
Posts: 1079
Joined: Tue Jul 26, 2005 2:41 am
Location: Northeast

Return to Mopeds in the Media

Who is online

Users browsing this forum: No registered users and 2 guests

cron