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May 11, 2002 | 1220 IST
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TVS Motor to set up plant in SE Asia

BS Bureau

TVS Motor Company has firmed up plans to set up its first overseas manufacturing facility, C P Raman, president of the company, said.

The location, to be finalised in the next three to four months, will be a toss-up between Indonesia, Thailand and Vietnam. The project is expected to get going in two years.

This follows the termination of the company's collaboration agreement with Suzuki Motor Corporation of Japan, which had restrictions on this.

The two-wheeler manufacturer has set itself a target of selling 10 per cent of its output outside of India in the next five years and 30 per cent in seven years. Significantly, the cost of manufacturing will be lower in these Asian countries than in India.

The basis of this ambitious programme is the company's perception of its technological capability which will again receive official recognition with the winning of a national award for commercialisation of indigenous technology developed for its successful new motorcycle launch, the 110 cc TVS Victor.

"Today R&D is the bedrock of competitiveness," Raman said.

This strength will enable it to launch a slew of products later this year including an entirely new motorcycle, a newer version of the Fiero (150 cc motorbike), a four-stroke version or Scooty and several upgraded versions of existing products.

Vinay Harney, vice president, R&D, described the company as customer and R&D driven. It has acquired its cutting edge in performance by being intensively involved with racing in which it has met with many successes in the last five years. Perhaps, consequentially, it has an 'excellent tract record of launches'.

Its technological confidence has been further bolstered by the success of Victor which has been entirely locally produced and incorporates many technological firsts in its class in the Indian market.

The company has 400 people engaged in product development, of whom 75 are post-graduate engineers, deploys 100 CAD workstations, uses specialised software, and has complete prototyping, measuring and accelerated testing facilities.

It has filed for 14 patents and 12 articles have been published in technical journals on R&D work done in the company.

The company was born out of R&D, Raman said, recalling how it secured its first licence from the government to manufacture a two-seater moped on condition that it would be totally indigenous - in design, components and machinery.

R&D expenditure, which has totalled Rs 1 billion so far, will amount to Rs 800 million in the current year, which will be around 4 per cent of turnover. The company expects motorcycle sales to go up by 10-12 per cent in the current year.

It also expects its margins to improve as it will save Rs 300 million by not having to pay royalty to Suzuki Motor and import components from it.

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