TVS’s global push is based on three pillars, besides riding on its 100-year legacy. TVS is betting big on technology and product quality, besides its wide range of offerings to take on competition in those markets — which largely comprise Japanese, Chinese and a handful of Indian brands. “TVS’s export strategy is working out well because it has focused on India-like markets (Asia, Africa, Latin America) for both two-wheelers and three-wheelers,” says Jinesh Gandhi, deputy head of research, Motilal Oswal Financial Services.
Coming to the two recent partnerships, TVS first joined hands with Motomundo SA, one of the leading business groups in Honduras. As a part of this association, Motomundo SA will facilitate the sales and service of TVS products across all Motomundo stores in the country in a phased manner. The company also announced a partnership with CADISA, a leading business group across Guatemala and El Salvador and inaugurated its flagship showroom in El Salvador. The two are expected to put their resources together to sell TVS’s four modern products — the Apache RR 310, the Apache RTR 200 4V, Apache RTR 160 4V and the Ntorq 125 scooter. Other than showcasing the bikes and the company’s technology, the dealership will also offer service, spare and other support in the region. TVS will also be present in 17 multi-brand showrooms and 150 retail stores in Guatemala.
Motomundo stores will start with one exclusive outlet for TVS and will, within a year, expand it to three stores in the country. TVS Motor Company will be present in 40 Motomundo outlets and over 25 dealers across Honduras over the next three years. The company will also operate 25 service outlets to ensure complete service and spare support. The company aims to be present in 100 plus multi-brand outlets and over 150 retail stores across Central America in thrtee years. The range of two-wheeler offerings will be supplemented with attractive retail finance schemes. R Dilip, executive vice-president, international business, TVS Motor Company, says, “The unique network of distribution that Motomundo SA has developed makes them the best strategic ally for TVS Motor Company. With this partnership, we will be able to offer customised products with complete service and spare parts to our customers and consolidate our presence in the region.”
Radhakrishnan expects the first half of FY21 to remain weak because of the current slowdown and the transition to Bharat Stage VI emission norms, with recovery in the domestic market from the second half of the year. TVS expects exports to continue to outperform the domestic market. That said, the path ahead won't be easy, the company knows. The outbreak of coronavirus impacted the supply of certain components for the production of BS-VI vehicles, but the company has told the media it was taking all necessary steps to normalise the situation at the earliest.
TVS Motor has been a late entrant in some of these markets compared to, say, Bajaj Auto, but it has been aggressive in expanding — both in terms of distribution network and the portfolio of offerings. “It has not only targeted new markets, it has also tried to offer as many of its products in these markets as possible (from mopeds to premium motorcycles). Also, it's association with BMW has had a rub-off on its brands in the export market. This has helped it to grow its exports — at 15 per cent in FY20 YTD and now contributes ~25 per cent of the total volumes,” says Gandhi of Motilal Oswal.
Gandhi explains the dilemma in the export market in these simple terms: “While the Japanese products are superior in quality, they are priced at the premium end. On their part, Chinese brands are cheaper but are deemed lower in terms of their quality standards. Indian brands like Bajaj and TVS have struck a balance between pricing and quality, which has helped them expand fast in these markets.”