TVS MOTOR COMPANY

Group Members
Nishi Goyal
Vartika Singh

ASHUTOSH KUMAR SINGH

IIEBM 2018-20
 INTRODUCTION
 Thirukkurungudi Vengaram Sundram Iyengar was the founder
of the TVS group. So the name TVS comes from his initial
name Thirukkurungudi Vengaram Sundram.

 TVS is one of the largest manufacturers of motorcycles, mopeds and auto

rickshaws in India.

 TVS Motor Company is a multinational motorcycle company headquartered at

Chennai, India.It is a public type company founded in 1978. It is the third largest
motorcycle company in India with a revenue of over 13,000 Cr ($2 billion) in
2016-17.
 The company has an annual sales of 3 million units and an annual capacity of
over 4 million vehicles. TVS Motor Company is also the 2nd largest exporter in
India with exports to over 60 Countries.

 TVS Motor Company Ltd (TVS Motor), member of the TVS Group, is the largest
company of the group in terms of size and turnover.
 Early 100 years-

TV Sundaram Iyengar began with Delhi first bus service in 1911 and founded TV sundaram
Iyengar and Sons ltd. Sundaram Clayton was founded in 1962 in collaboration with
Clayton Dewandre Holdings, United Kingdom. It manufactured brakes, exhausts,
compressors and various other automotive parts. The company set up a plant at Hosur in
1978, to manufacture mopeds as part of their new division.
In 1980, TVS 50, India's first two-seater moped rolled out of the factory at Hosur in Tamil
Nadu, Southern India. A technical collaboration with the Japanese auto giant Suzuki Ltd.
resulted in the joint-venture between Sundaram Clayton Ltd and Suzuki Motor
Corporation, in 1982. Commercial production of motorcycles began in 1984.

 Suzuki relationship-
TVS and Suzuki shared a 19-year-long relationship that was aimed at technology transfer,
to enable design and manufacture of two-wheelers specifically for the Indian market. Re-
christened TVS-Suzuki, the company brought out several models such as the Suzuki
Supra, Suzuki Samurai, Suzuki Shogun and Suzuki Shaolin. In 2001, after separating ways
with Suzuki, the company was renamed TVS Motor, relinquishing its rights to use the
Suzuki name. There was also a 30-month moratorium period during which Suzuki
promised not to enter the Indian market with competing two-wheelers.
 SWOT ANALYSIS OF TVS
 STRENGTHS:-  WEAKNESSES:-

 Multiple products across spectrum: TVS offers  Lack of Scale:

mopeds, motorcycles, scooters and three
wheelers and has popular brands amongst all the
categories.
 For example, motorcycles include popular brands
like Apache RTR and Star City etc. whereas
scooters include TVS Jupiter and Scooty pep+ etc.
 Strong financial performance: TVS has
experienced strong financial performance in
recent years. It recorded growth in revenues
(12.3%) and operating margin (4.8%) in FY 2016..
 Although TVS has experienced the increase in
revenues in the recent past, it still doesn’t stand tall
when compared to large companies like Bajaj
Auto and hero MotoCorp. These companies have
the capital advantage over TVS.
 Overdependence on domestic market:
 India is TVS motor’s primary market contributing
over 75 percent of its revenues. TVS has limited
geographical diversity and hence is over dependent
on the Indian market. Any vulnerability in the Indian
market will affect the company’s finances.

 Strong R&D capabilities: TVS has set up a strong

research and development department which
allows constant innovation in its product design
and include newer technologies in its products.
This provides a competitive advantage to TVS.
 OPPORTUNITIES:-
 Growing Indian 2-Wheeler market: India
has witnessed rapid growth in the 2-
wheeler market which is expected to
continue in the near future.
 India is the second fastest growing market
in the two-wheeler industry. This presents
an opportunity for TVS to encapsulate
the demand created.
 Growth in three wheeler market: The three
wheeler passenger as well as load carrier
market is growing in India. The three
wheeler industry has grown with a CAGR of
4.4% from the period 2005-2015. This also
creates and opportunity for TVS.
 Optimistic outlook for global motorcycle
industry: TVS must look forward to
expanding operations globally in order to
tap the positive outlook for the global
motorcycle industry which is expected to
grow at a rate of 6.3% till 2019.
 THREATS:-
 Intense competition: The Indian two-wheeler
industry is highly competitive with the
presence of various multinational and
national brands such as Yamaha, Bajaj
Auto, Honda and hero MotoCorp etc.
 TVS being subjected to such competition has
to constantly innovate in order grow in such
intense competitive atmosphere.
 Environmental regulations: The Company is
subjected to various stringent environmental
regulations which are constantly upgraded
and hence the compliance costs increase.
 Improvement in public transport: The public
transportation facilities in India are improving
which is a threat to the passenger vehicle
industry as a whole.
Financial highlights-
Particular 2013-14 2014-15 2015-16

Sales Turnover 8652.09 10813.86 12231.12

Excise Duty 690.24 715.64 988.25

Net Sales 7961.85 10098.22 11243.87

Other Income 21.84 124.68 --19.22

Total Income 7983.35 10222.90 11224.65

Total Expenses 7471.10 9585.99 10422.60

Gross Profit 512.25 636.91 802.05
REASON FOR INCREASE IN INCOME
 2013- best graphic design automotive award because of which TVS came
into light and also signed cooperation agreement with BMW Motorrad.

 2014- Set up assembly line in Uganda and also introduced Synthetic engine
oil along with that it also introduced TVS Star city, became most preferred
bike by middle class which boomed the sale.

 2015- Special edition of TVS XL Super was introduced on the occasion of 1

cr.+ sale.

 MOU with Tamilnadu govt. for investment of 350 crore.

 TVS Sports with improved version and improved mileage at nominal price.
 COMPARISON-
HERO MOTOCORP- TVS MOTORS-

 Hero Motocorp (HMC; erstwhile Hero Honda  TVS is the third largest player in the two-
Motors) is the largest manufacturer of wheeler industry in India. Started in
motorcycles in the world. The company was collaboration with Suzuki Motors, Japan, the
earlier a joint venture promoted by Hero
Cycles (P) Limited and Honda Motor year 2002 saw Suzuki Motors exit from the
Company with each partner holding 26% business, forcing the TVS management to
stake. HMC is solely engaged in commit itself to sizeable investment and
manufacturing and sale of motorcycles and develop its own R&D. Compared to its
gearless scooters. Its initial technology
agreement with Honda expired in 2004, predominantly southern-market oriented
which was extended till 2014. However, in growth in the past, it has been expanding
December 2010, Hero Honda made an presence in other regions. In FY09, while
announcement with respect to the new motorcycles constituted 48% of its total
licensing agreement, which eventually led
the Hero Group to buy out Honda's 26% portfolio, scooters and mopeds contributed
stake. Some of the other features of the 19% and 33% respectively.
agreement included fresh licensing
agreement with Honda to provide new
models, freedom to export to new markets
and independence to set up own R&D and
new product development capabilities and
acquire technology.
 ACQUISITION OF THE COMPANY-
• Motor Company Ltd has joined hands with BMW Motorrad to develop and
manufacture a new series of motorcycles that will cater to the sub-500cc
segment. The bulk of India’s motorcycle market falls in that category where
Hero MotoCorp, Bajaj Auto and Honda Motorcycle & Scooter India, followed
by TVS, happen to be the key players.
• Motorcycles with high-powered engines happen to be the space where global
firms dominate but it covers only a small portion of the local market.
• As per the agreement, both companies will offer their own vehicle derivatives,
which will be sold through their own distribution channels in India and across
the globe.
• “With BMW Motorrad, we see an ideal long-term strategic partner who shares
our core values – focus on quality, engineering prowess, innovation and
customer satisfaction. We intend to leverage each other’s strengths to deliver
a new series of products, offering cutting-edge technology for our customers,”
said Venu Srinivasan, chairman of TVS Motor.
• “In view of changing motorcycle markets, demographic developments and
increasing environmental demands, we are expanding our product range so as
to tap into fresh growth potential. This means in future, we will be able to offer
vehicles in smaller capacity classes in addition to the BMW Motorrad core
segments,” said Stephan Schaller, president of BMW Motorrad.