INDUSTRIAL EXPOSUREPROJECT

On
“TVS MOTORS”
Submitted in Partial Fulfillment of the requirements for the
Award of Degree of Bachelor of Business Administration (BBA)
2016-2019

Submitted by: Nishant Chaudhary

Under the guidance of: MR. Shakti Sharma

BHARATI VIDYAPEETHUNIVERSITY
SCHOOL OF DISTANCE EDUCATION,
Academic Study Center – BVIMR, New Delhi

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 (A Constituent Unit of Bharati Vidyapeeth University
,Pune)AnISO9001:2000CertifiedInstitute
NAAC Re-Accreditation Grade “A” University
ACKNOWLEDGEMENT
This project is a result of dedicated effort. It gives us immense
pleasure to prepare this project report on marketing strategy of
“TVS MOTORS” We would like to thank our project guide MR.
SHAKTI SHARMA, for consultative help and constructive
suggestions on the matter on this project. We would like to
thanks our parents and colleagues who have helped us in
making this project a successful one.

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 DECLARATION
This is to certify that I have completed a Project titled "To Study
the Marketing Strategy of “TVS MOTORS” under the guidance
of MR. SHAKTI SHARMA in the partial fulfillment of the
requirement for the award of Bachelors of Business
Administration of BharatiVidyapeeth University, New Delhi.
This is an original piece of work & I have not submitted it earlier
elsewhere.

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Nishant Chaudhary

CONTENTS
CHAPTER 1:- Introduction to Company
1.1:- Nature of Business/History
1.2:- Type & Ownership pattern
1.3:- Organizational structure
1.4:- Production Layout
1.5:-Organizational Policies
CHAPTER 2:- Industrial Analysis
2.1:- Industrial Overview
2.2:- Current Issues
2.3:- Key Competitors
2.4:- Environmental Scanning (PESTEL analysis)
2.5:-Porter’s Five Forces Model of Competition
CHAPTER 3:- Marketing Strategy
3.1:- Products of the company
3.2:- 4'Ps
3.3:- STP (Segmenting Targeting and Positioning)
3.4:- Distribution Channels
3.5:- Promotion Strategy
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CHAPTER 4:- Financial Analysis
4.1:- Sources of Finances
4.2:- Ratio Analysis (Any 3)
4.3:-Net Profit or Net Balance Sheet
CHAPTER 5:- Key learning from the company and
Recommendations
5.1:- Performance Analysis of the company [Minimum 4-5
lines]
5.2:- Reasons for the diversification of the company
5.3:- Comment on Organizational Leadership
5.4:- Market Share / Growth Rate of the company
5.5:- SWOT Analysis of the company
CHAPTER 6:- Finding
CHAPTER 7:- Conclusion

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  NATURE OF BUSINESS

TVS Motor Company is the third largest two-wheeler manufacturer in India,

with revenue of over 13,000 Cr ($2 billion) in 2016-17. It is the flagship
company of the Rs. 40,000 Cr ($6 billion, in 2014-15) TVS Group. The
company has 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.

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TVS Motor Company Ltd (TVS Motor), member of the TVS Group, is the
largest company of the group in terms of size and turnover, with more than 3
crore (30 million) customers riding a TVS bike.

History
TVS was established by Mr TV Sundaram Iyengar. He began with Delhi first
bus service in 1911
And founded T.V.Sundaram Iyengar and Sons Limited, a company in the
transportation business with a large fleet of trucks and buses under the name
of Southern Roadways Limited.[2] When he died in 1955, his sons took the
company ahead with several forays in the automobile sector, including
finance, insurance, and manufacture of two-wheelers, tyres and components.
The group has managed to run 97 companies that account for a combined
turnover of nearly $6 billion.
Early years 100
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 Hour 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 Hour 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. [3]
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. [4]
Recent

TVS also competes in the 3 Wheeler segment

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Recent Launches include RTR 200, TVS Victor and TVS XL 100. TVS has
recently won 4 top awards at J.D. Power Asia Pacific Awards 2016, 3 top
awards at J.D. Power Asia Pacific Awards 2015 & Two-Wheeler Manufacturer
of the Year at NDTV Car & Bike Awards (2014–15)
In early 2015, TVS Racing became the first Indian factory team to take part in
the Dakar Rally, which is the longest and most dangerous rally in the world.
TVS Racing partnered with French motorcycle manufacturer Sherco for the
Dakar rally, and named the team Sherco TVS Rally Factory Team. TVS
Racing also won the Raid de Himalaya and the FOX Hill Super Cross held at
Sri Lanka. In three decades of its racing history, the team has won more than
90% of the races.
In 2016 TVS started manufacturing the BMW G310R, a model co-developed
with BMW Motorrad.
In 2017, 6th of December TVS launched their most-awaited motorcycle, the
Apache RR 310 in an event at Chennai. The 310cc motorcycle with an engine
which was co-developed with BMW features first ever full fairing on a TVS
bike, dual-channel ABS, EFI, KYB suspension kits, etc. It is expected to rival
bikes like KTM RC 390, Kawasaki Ninja 250SL after hitting the market. The
Apache RR 310 is designed and realised entirely in India.

Characteristics of TVS Motor

TVS Motor was the first Indian company to deploy a catalytic converter in a
100 cc motorcycle and the first to indigenously produce a four stroke 150cc
motorcycle. The list of firsts from TVS: "India’s first 2-seater moped – TVS
50", "India’s first indigenous scooterette - TVS Scooty", "India’s first Digital
Ignition - TVS Champ", "India’s first fully indigenous motorcycle - Victor", "First
Indian company to launch ABS in a motorcycle - Apache RTR Series", "The
first scooter with Body-Balance Technology – TVS Wego","The clutchless
motorcycle=Jive", "Indonesia’s first dual-tone exhaust noise technology –
Tormax" & "India's first oil-cooled chamber construct with Ram-Air assist- TVS
Apache RTR 200 4V". TVS has gone through extensive quality improvement
programs thus producing world class two-wheelers.

TVS Motor Company Limited

Type Public company

Traded as BSE: 532343, NSE: TVSMOTOR

Industry Motorcycle

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Founded 1978

Founder T. V. Sundaram Iyengar

Headquarters Chennai , Tamil Nadu, India

Number of 4 two wheeler and 1 three wheeler plants

locations

Key people Venu Srinivasan

(Chairman & Managing
Director) , Sudarshan venu
(Joint Managing Director)

Products Motorcycles, scooters, three-wheeler vehicle
s and spare parts

Revenue 13363 CR INR (2016-17)

Operating ₹4.44 billion (US$69 million) (2016)[1]

income

Profit ₹3.28 billion (US$51 million) (2016)[1]

Total assets ₹49.22 billion(US$770 million) (2016)[1]

Total equity ₹15.83 billion(US$250 million) (2016)[1]

Parent Sundaram - Clayton Limited

Website www.tvsmotor.com

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  TYPE AND OWNERSHIP PATTERN

Shareholding Pattern - TVS Motor Company Ltd.

Holder's Name No of Shares % Share Holding

Promoters 272682786 57.4%

Foreign Institutions 101825193 21.43%

General Public 43129889 9.08%

N Banks Mutual Funds 34316193 7.22%

Financial Institutions 13077116 2.75%

Others 10055937 2.12%

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Performance
  YTD1-Month3-Month 1-Year 3-Year 5-Year 10-Year
TVS Motor Co. -16.40 -16.86 -8.95 65.61 31.05 72.09 41.42
S&P BSE 2.97 3.71 4.45 24.23 6.38 12.12 6.75
Sensex
S&P BSE Auto -5.75 -5.09 0.02 12.95 7.88 18.27 17.53
Company's return has been calculated on basis of BSE's price. 
As on Feb 02, 2018

 ORGANIZATIONAL STRUCTURE

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Board Of Directors

NAME DESIGNATION
Mr.Venu Srinivasan Chairman & Managing Director
Dr.Lakshmi Venu Director
Mr. Hemant Krishan Singh Director
Mr. H lakshamanan Director
Mr.Prince Asirvatham Director
Mr.R Ramakrishnan Director
Mr.C R Dua Director
Mr.T Kannan Director
Mr.Rajesh Narasimhan Independent director
Mr.Sudarshan Venu joint managing director

 PRODUCTION LAYOUT

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Raw Materials
The primary raw materials used in the manufacture of the body of motorcycle are
metal, plastic and rubber. The motorcycle frame is composed almost completely of
metal, as are the wheels. The frame may be overlaid with plastic. The tires are
composed of rubber. The seat is made from a synthetic substance, such as
polyurethane. The power system consists of a four-stroke engine, a carburetor to
transform incoming fuel into vapor, a choke to control the air-fuel ratio,
transmission, and drum brakes. The transmission system contains a clutch,
consisting of steel ball flyweights and metal plates, a crankshaft, gears, pulleys,
rubber belts or metal chains, and a sprocket. The

electrical system contains a battery, ignition wires and coils, diodes, spark plugs,
head-lamps and taillights, turn signals and a horn.
A cylindrical piston, made of aluminum alloy (preferred because it is lightweight
and conducts heat well), is an essential component of the engine. It is fitted with
piston rings made of cast iron. The crankshaft and crankcase are made of
aluminum. The engine also contains a cylinder barrel, typically made of cast iron or
light alloy.
The Manufacturing 
Process
1. Raw materials as well as parts and components arrive at the manufacturing
plant by truck or rail, typically on a daily basis. As part of the just-in-time
delivery system on which many plants are scheduled, the materials and
parts are delivered at the place where they are used or installed.
2. Manufacturing begins in the weld department with computer-controlled
fabrication of the frame from high strength frame materials. Components

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 are formed out of tubular metal and/or hollow metal shells fashioned from
sheet metal. The various sections are welded together. This process
involves manual, automatic, and robotic equipment.
3. In the plastics department, small plastic resin pellets are melted and
injected into molds under high pressure to form various plastic body trim
parts. This process is known as injection molding.
4. Plastic and metal parts and components are painted in booths in the paint
department using a process known as powder-coating (this is the same
process by which automobiles are painted). A powder-coating apparatus
works like a large spray-painter, dispersing paint through a pressurized
system evenly across the metal frame.
5. Painted parts are sent via overhead conveyors or tow motor (similar to a ski
lift tow rope) to the assembly department where they are installed on the
frame of the motorcycle.

A motorcycle engine.
6. The engine is mounted in the painted frame, and various other components
are fitted as the motorcycle is sent down the assembly line.
7. Wheels, brakes, wiring cables, foot pegs, exhaust pipes, seats, saddlebags,
lights, radios, and hundreds of other parts are installed on the motorcycle

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 frame. A Honda Gold Wing motorcycle, for example, needs almost as many
parts to complete it as a Honda Civic automobile.
Quality Control
At the end of the assembly line, quality control inspectors undertake a visual
inspection of the motorcycle's painted finish and fit of parts. The quality control
inspectors also feel the motorcycles with gloved hands to detect any bumps or
defects in the finish. Each motorcycle is tested on a dynamometer. Inspectors
accelerate the motorcycle from 0-60 mph. During the acceleration, the "dyno"
tests for acceleration and braking, shifting, wheel alignment, headlight and taillight
alignment and function, horn function, and exhaust emissions. The finished
product must meet international standards for performance and safety. After the
dyno test, a final inspection is made of the completed motorcycle. The motorcycles
are boxed in crates and shipped to customers across North America and around
the world.
The Future
Motorcycles remain popular and the collecting and riding of antique models is just
as popular as riding the new versions. While sleek, new versions will continue to be
produces,

A motorcycle transmission and disc brake system.

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it is anticipated that the value of older models will continue to rise.
Where to Learn More
Books
Ayton, Cyril, Bob Holliday, Cyril Posthumus and Mike Winfield. The History of
Motorcycling. London: Orbis Publishing, 1979.
Lear, George and Lynn S. Mosher, Motorcycle Mechanics. Englewood Cliffs, NJ:
Prentice Hall, 1997.
— Kristin Palm

 ORGANISATIONAL POLICY

PHILOSOPHY OF CODE OF GOVERNANCE

TVS MOTOR COMPANY LIMITED (TVSM), in line with TVS Group philosophy, truly
believes in independence, responsibility, transparency, professionalism,
accountability and code of ethics, which are the basic tenets of corporate
governance. TVSM always seeks to achieve optimum performance at all levels in
adopting and adhering to best corporate governance practices. TVSM has always
focused on corporate governance as a means to maximize long-term stakeholders’
value through disciplined and sustained growth and value creation.
CODE
This code of business conduct and ethics helps to ensure compliance with legal
requirements and standards of business conduct. The board of directors (the board)
has adopted a code of business conduct and ethics (the code) for all board members
and senior management personnel viz., all members of management one level below
executive directors, including all functional heads. Every board member and senior
management personnel is expected to read and understand this Code and its
application to the performance of his or her duties, functions and responsibilities.

HONESTY, INTEGRITY & PROFESSIONAL CONDUCT

All board members and senior management personnel shall:

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  conduct their activities, on behalf of TVSM and on their personal behalf, with
honesty, integrity and fairness and uphold ethical standards of integrity and probity;
 act in good faith, responsibility, with due care, competence and diligence, without
allowing their independent judgement to be subordinated and objectively and
constructively, while exercising his / her duties ;
 act in the best interest of TVSM, its various stakeholders including TVSM
shareholders and fulfil the fiduciary obligations and exercise his responsibilities in a
bona fide manner in the interests of TVSM;
 devote sufficient time and attention to his / her professional obligations for
informed and balanced decision making;
 Not engage in conduct that is likely to bring discredit upon TVSM;
 not use his position to the detriment of TVSM or its shareholders or for the purpose
of gaining direct or indirect personal advantage or advantage for any associated
person;
 not allow any extraneous considerations that will vitiate his exercise of objective
judgments in the paramount interest of TVSM as a whole, while concurring in or
dissenting from the collective judgment of the Board in its decision making;
 Comply with every provision of this Code and assist TVSM in implementing the best
corporate governance practices.

FAIR DEALING

All board members and senior management personnel should deal fairly with TVSM’s
customers, suppliers, competitors, officers and employees.

No board member or senior management personnel may take unfair advantage of TVSM’s
customers, suppliers, competitors or employees through manipulating, concealment, abuse
of privileged information, misrepresentation of material facts or any other unfair dealing
practice.

Gift or entertainment in any form that is likely to result in a feeling of expectation of

personal obligation should not be accepted or extended.

REGULATIONS
All board members and senior management personnel shall comply with all applicable laws,
rules, regulations and guidelines, including obligations under take-over and insider trading
regulations and shall report actual non-compliances, if any, of law, this code, or other TVSM
policies or procedures to the board. As a public company, it is of critical importance that
TVSM’s filings with the Securities and Exchange Board of India, the Reserve Bank of India
and/or the concerned stock exchange (s) on which the securities of TVSM are or may be
listed be full, fair, accurate, timely and understandable. All board members and senior
management personnel may be requested to provide information necessary to ensure that
TVSM’s published reports meet these requirements. TVSM expects all board members and

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senior management personnel to provide prompt and accurate answer to enquiries relating
to its public disclosure requirements. All board members and senior management personnel
shall comply with all applicable laws, rules, regulations and guidelines, including obligations
under take-over and insider trading regulations and shall report actual non-compliances, if
any, of law, this code, or other TVSM policies or procedures to the board. As a public
company, it is of critical importance that TVSM’s filings with the Securities and Exchange
Board of India, the Reserve Bank of India and/or the concerned stock exchange (s) on which
the securities of TVSM are or may be listed be full, fair, accurate, timely and understandable.
All board members and senior management personnel may be requested to provide
information necessary to ensure that TVSM’s published reports meet these requirements.
TVSM expects all board members and senior management personnel to provide prompt and
accurate answer to enquiries relating to its public disclosure requirements.

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  INDUSTRIAL OVERVIEW

Group companies:
• TV Sundram Iyengar and Sons • Lakshmi Auto Components • Lucas Indian
Service • Axles India • Brakes India • Harita Grammer • India Motor Parts and
Accessories • India Nippon Electricals • Lucas TVS Limited • Madras Auto
Service • Southern Roadways • Sundaram Brake Linings • Sundaram Fasteners
• Sundaram Finance • Sundaram Industries • Sundaram Motors • Sundaram
Clayton • Sundaram–Clayton • Srinivasan Services Trust
Awards and achievements:
2012 – CII–ITC Sustainability Awards 2012 
• The Deming Prize – TVS Motor Company is the only two–wheeler company
in the world to be awarded the world's most prestigious and coveted
recognition in Total Quality Management.
• Technology Award 2002 from the Ministry of Science, Government of India
for the successful commercialization of indigenous technology for TVS
Victor.    
• Asian Network for Quality Award 2004 – TVS Scooty Pep won the
prestigious 'Outstanding Design Excellence Award' from Business World and
National Institute of Design.
• Progressive Manufacturer 100 Award – TVS wins coveted 2009 Progressive
Manufacturer 100 Award for end–to–end automation of the entire business
process of its lubricant brand, TVS TRU4.
• TPM Excellence Award 2008 – First category by Japan Institute of Plant
Maintenance (JiPm). Most Investor friendly company by Business Today, one
of India's leading business
• The 'Good Advertising' award by Auto India Best Brand Awards 2009.

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• SAP ACE AWARD 2007 – The Company won the SAP ACE 2007 Award for
Customer Excellence in the Most Innovative Netweaver Category.
• TEAM TECH 2007 Award – TVS Motor Company bagged the TEAM TECH
2007 Award of Excellence for Integrated use of Computer Aided Engineering
Technologies.

INDUSTRY STRUCTURE AND DEVELOPMENTS

Two-wheeler
Domestic two-wheeler industry grew at 7% in 2016-17. Higher growth rate of
16% was observed till October 2016 through revival of urban demand
boosted by the 7th pay commission. Despite lower than normal monsoon in
south, output improved over last year leading to 4% agri GDP growth. Effect
of this would have been visible in second half of 2016-17. However,
Government of India’s decision to demonetize 86% of the legal tender led to
severe fall of demand across industries from November 2016. Two-wheeler
industry also suffered a decline of 5% in the period from November 2016 to
March 2017.
In the domestic market, two-wheeler industry grew from 165 lakhs in 2015-
16 to 176 lakhs in 2016-17. Scooter as a category continued to gain
category share in total two-wheeler industry. Scooters grew at 11% (from
50.3 lakhs to 56 lakhs) and the category share increased to 32% due to
changing consumer preferences and leading urban demand. The
motorcycle category grew at 4% (111 lakhs). Within motorcycles, continued
traction in urban demand enabled the premium segment to grow by 16%
(from 14.7 lakhs in 2015-16 to 17.1 lakhs in 2016-17). In contrast,
commuting segment declined by 1% (from 85 lakhs in 2015-16 to 84 lakhs
in 2016-17). Mopeds grew by 23% in 2016-17.
Crude oil prices continued to remain subdued for major part of the year.
Similarly, commodity prices were also soft, leading to lower economic
growth and in turn reduced availability of foreign exchange in key countries
in Africa, which impacted exports of two-wheeler and three-wheeler from
India. Changes in duty structure in Srilanka also affected Company’s
exports. Consequently, export of two-wheeler which consistently grew in the
past declined for the first time by 5.8% during 2016-17.
Three-wheeler
The three-wheeler industry inclusive of diesel vehicles (3 plus 1 segment)
declined by 24% (from 5.99 lakhs in 2015-16 to 4.57 lakhs in 2016-17).
Exports share of three-wheeler industry reduced from 65% in 2015-16 to
58% in 2016-17, due to a decline by 32% in export sales (from 3.90 lakhs in
2015-16 to 2.64 lakhs in 2016-17). Three-wheeler domestic passenger
market declined by 7% during 2016-17 (from 2.09 lakhs in 2015-16 to 1.94
lakhs in 2016-17).

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BUSINESS OUTLOOK AND OVERVIEW
Good fiscal health and higher rural focus rolled out in Central Financial
Budget 2017-18 is likely to improve demand in rural markets. However, the
monsoon forecast of possible 5% shortfall can be a dampener for growth of
agricultural sector. The informal sector is likely to grow slowly and is still
recovering from the effects of demonetization. The implementation of
Goods and Services Tax (GST) during 2017-18 may lead to some down
stocking by the Company to avoid any transition loss.
The advancement of retail sales due to heavy discount offered by the
dealers to clear BSIII stocks can also marginally affect the sales during the
first quarter of 2017-18. Consequently, the growth in two-wheeler industry
during 2017-18 is expected to be around 6% to 8% over 2016-17.
New Product Launches and Initiatives
The Company has a strategic partnership with BMW Motorrad to develop
and manufacture sub-500cc bikes both for domestic and global markets.
The BMW G310R is the first motorcycle to be manufactured under this
partnership and manufacturing and exports of this motorcycle has
commenced. The Company will launch their own motorcycle based on this
common platform in FY 2017-18.
During the year 2016-17, the following new products and variants were
launched.

TVS Jupiter:
Jupiter brand lives true to its philosophy of ZYADA KA FAYDA. Launched in
September 2013 with next-gen 110cc CVT-I Engine, best-in-class mileage
and many class-leading features, TVS Jupiter, the most awarded scooter
took riding comfort of scooters to the next level.
TVS Jupiter is the No.2 Scooter brand in India and has crossed one million
customer base, the fastest ever in the scooter category. To commemorate
the same, the Million R edition was launched in June 2016. The Million R
was an instant hit with its Royal Wine color, Beige colored interior panels,
dual tone seat and 3D logo. The popularity of the color (Royal Wine) led to
its extension to the ZX series subsequently. To infuse further excitement, 2
new colors, Mystic Gold and Jade Green were introduced in January 2017.
TVS Scooty Zest 110:
TVS Scooty has always been at the forefront of women empowerment.
Keeping true to this trend a special expedition to the Himalayas had been
created with Scooty Zest 110. This one-of-a-kind road trip made Scooty Zest
110 become world’s first 110cc Scooter to scale the highest motor able
road of the world (Khardung La) with a woman rider. A limited-edition Zest
was launched to commemorate this great feat. As one of the fast-moving
colours in the portfolio, it was a constant reminder of the great Himalayan
achievement.

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StaR City+:
StaR City+ is a stylishly superior 110cc motorcycle delivering an ideal
combination of smooth performance, power and fuel economy. It comes
with tubeless tyres and digital fuel gauge. Chocolate Brown Gold edition &
New Spotlight White colors were introduced in StaR City+ in 2016-17.
TVS Sport:
TVS Sport is an entry level 100cc motorcycle that stands for best in class
mileage and durability. It comes with all gear electric start option,
aluminium grab rail, chrome muffler guard and a sporty instrument cluster.
Black Silver dual tone color and Volcano Red refreshes were introduced in
2016-17.
The superior quality of the Company’s products and services was well
established again in the recent JD Power Study.
In IQS (Initial Quality Study), the Company’s products have the lowest
number of defects compared to competitors. In premium motorcycles,
Apache RTR 160 is on top and Apache RTR 180 is in top 3 position. In
economy motorcycles (all motorcycles less than 125cc), TVS StaR City+ is
on top and TVS Sport and TVS Victor 110 are in the top 5. In APEAL
(Automotive Performance, Execution and Layout) Survey, measuring how
gratifying a new two-wheeler is to own and ride based on owner
evaluations. TVS Jupiter, TVS Sport and Apache RTR 160 and 180 secured
rank in the top 3 in their respective categories.
The Company was rated No.1 in the inaugural CSI study 2016 by JD Power.
Domestic Sales
Apache continues its growth trend with 13% increase over previous year.
New Apache RTR 200 4V was received very well in the market and is
contributing well to the Apache brand.
With the launch of TVS Victor 110, the Company grew 6% in the commuter
motorcycle category bucking the declining trend of the industry.
TVS Jupiter has been able to make a mark with periodic introduction of
limited edition which kept the brand momentum high and clocking at a
growth rate of 14%.
The Company has strong distribution network of authorized dealers across
India and continuously seeks to increase its reach.
Exports sales - two-wheeler and three-wheeler
The Company’s two-wheeler exports grew by 2.4% in 2016-17 amidst the
declining two-wheeler exports industry. The Company’s three-wheeler
exports, which are primarily dependent on Africa declined by 40% due to
non-availability of foreign exchange in those markets.
Opportunities and Threats
Proposed thrust in rural India, efficient implementation of various
Government schemes and improved rural economy will aid improvement of
two-wheeler penetration.

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Growing middle class, aspirational life style, need for mobility and increased
penetration levels will continue to trigger growth of two-wheeler industry.
Emergence of alternate energy based mobility vehicles is requirement of
future. The Company is committed to support this initiative by developing
suitable technology and business solutions. Strong presence of the
Company in all segments of two-wheeler industry, planned new launches
and expanded network of dealers will help the Company to consolidate its
gain further and grow ahead of the Industry in the coming years.
RISKS AND CONCERNS
Smooth GST transition and a good monsoon are essential for growth in
domestic two-wheeler demand. Continued non-availability of foreign
exchange in key export markets, remains a concern. The sustained
momentum in scooters and motorcycles and success of planned launches
are vital to achieve business objectives. If the two-wheeler industry growth
remains at a low level, higher competitive intensity can lead to lower
margins. The Company will initiate various cost reduction measures to
mitigate this risk.
RISK MANAGEMENT
The Board has established a robust Risk Management framework to
identify, monitor and minimize risks as well as to identify business
opportunities.
Risk evaluation and management is an ongoing process. As a process, risks
associated with the business are identified and prioritized based on the
Company’s overall risk appetite, strategy, severity and probability of
occurrence.
The risk function is looked after by a team under CEO of the Company.
Process owners are identified for each risk and metrics are developed for
continuous monitoring and minimization of risk.
The Board is satisfied that there are adequate systems and procedures in
place to identify, assess, monitor and manage risks. The Company’s Audit
and Risk Management Committee is overseeing all the risks that the
organization faces such as strategic, financial, market, IT, legal, regulatory,
reputational and other risks and recommends suitable action. Risk
Minimisation policy has already been approved by the board.
OPERATIONS REVIEW
Total Quality Management (TQM)
In the journey towards excellence, the Company continues to rely on TQM.
Periodic assessment of gaps and immediate actions to address such
identified gaps have strengthened the process across the Company.
The Company significantly enhanced the executives and managers problem
solving competency by certifying 130 of them in Green belt and Black belt in
the current year. Workmen contribution to suggestion schemes and Quality

23
Control Circle (QCC) projects have yielded significant results in achieving
Quality Cost Delivery (QCD) targets and eliminating unsafe incidents.
Cost Management
The Company continues to focus on all elements of cost. Raw materials /
components and conversion cost constitute major element of material cost.
Focus on employee productivity and effectiveness of communication cost
helps to reduce fixed cost of the Company.
Process improvement, waste elimination and productivity improvements
across the supply chain will continue to receive greater attention. The
Company will pursue process innovation, value engineering and alternate
sourcing to reduce material costs during this year.
Research and Development
TVS Apache 200, TVS Victor and TVS XL 100 has won many prestigious
awards for the indigenous design. The Company’s Research and
Development (R&D) team has developed technology and the entire product
range is compliant with BSIV emission norms, reducing the emissions
substantially. BSIII to BSIV transition was carried out smoothly in a planned
manner as depicted in the chart:

 CURRENT ISSUES

1.

24
Auto Expo 2018: TVS showcases electric, ethanol-fuelled two-

wheelers

TVS Creon features a next-gen electric motor that propels the scooter from
zero to 60 kmph in under 5.1 seconds.

Two-wheeler major TVS Motor Company has pointed towards spreading its

wings to newer, lesser polluting vehicles in future. The company showcased
its electric scooter concept TVS Creon and ethanol powered motorcycle, TVS
Apache RTR 200 Fi Ethanol at the AutoExpo 2018 in National Capital Region.
It has also announced TVS Zeppelin, a futuristic motorcycle cruiser concept
here.TVS Creon, a performance-oriented electric scooter concept, features a
next-generation electric motor that propels the scooter from zero to 60 kmph
in under 5.1 seconds and boasts of a range of 80 km.A rapid charging time of
60 minutes for 80 per cent of full charge is on par with current generation
smartphones, leaving little idle time while charging, claims the company. It
has also connected technologies developed in collaboration with Intel. The
vehicle is powered by three Li-ion batteries specially designed to ensure high
charge per volume of battery, capable of delivering 12 kW of instantaneous
power.
The design is to keep overall dimensions of the TVS Creon compact and
maintain everyday practicality of usage. It has a TFT Screen that displays the
speedometer, battery charge and, health status, tachometer, trip meter and

25
odometer. The vehicle is app-enabled and offers cloud connectivity, three
custom riding modes, regenerative braking, and park assist.Vinay Harne,
President–New Product Development, TVS Motor Company, said that the
collaboration with Intel is aimed at creating a unique positioning for Hybrid and
Electric scooter series from TVS Motor Company as both Green-energy
champions and smart-connected gadgets. The ethanol powered
motorcycle, TVS Apache RTR 200 Fi Ethanol, is equipped with technical
improvements to make the motorcycle reliable with Ethanol as fuel. It also has
a Twin-Spray-Twin-Port EFI technology for better drivability, faster throttle
response and further guarantees reduction in emission levels. With these
technologies, the engine operation becomes linear leading to better usable
power under varied ambient conditions thereby increasing the performance, it
claims. The company also showcased TVS Zeppelin, a futuristic motorcycle
cruiser concept with sleek metal body, 220 cc engine and a patented
Integrated Starter Generator with an e-boost option helping the vehicle to start
faster.
Updated at February 7, 2018

2.

Piaggio to take on Bajaj Auto in three-wheeler segment; plans expansion

Italian auto company Piaggio is gearing to expand its market share in the

three-wheelers and compete against the segment leader, Bajaj Auto. The
company enjoys about 25 per cent share in the domestic three-wheeler
market, where over 500,000 units are sold every year.

“We want to increase our leadership in the cargo segment where we were the
first mover almost two decades ago. In the passenger segment, we will focus
on the alternative fuel (CNG and LPG) category in which we see a huge
potential. With the kind of products and network we have, we can compete
with Bajaj Auto anywhere. India is a huge market and metro cities are seeing
a strong volume growth,” said Diego Graffi, CEO and managing director
at Piaggio Vehicles.  

Piaggio sold 111,730 units of three-wheelers (cargo and passenger variants)

in the April-December period of the current financial year when its sales

26
declined by over 5 per cent. On the other hand, Bajaj Auto sold 247,408 units,
registering a 22 per cent growth. 

Piaggio also sells small commercial vehicles for goods, though the volume
here is about 150 units a month. Piaggio is also the third biggest exporter of
three-wheelers from India (after Bajaj and TVS) and shipped over 18,000
units in the first nine months of the financial year.

Piaggio is ahead of Bajaj in cargo three-wheelers and enjoys close to a 50 per

cent market share. Of its total three-wheeler sales in the April-December
period, 41,286 units were cargo vehicles. Bajaj sold 15,423 units. Graffi said
both the companies, Bajaj and Piaggio, were players in the same market.
“But, we are different in terms of product. The product portfolio is same, but
our strength and focus are different,” he said.

Graffi, who was earlier the global head of purchase and procurement at the
division for Piaggio, said the Indian market accounts for over 30 per cent of
the volume for Piaggio.“India is a fundamental asset in the Piaggio Group,
both in sales and profitability,” he said and added that the India business has
been profitable for years.

Piaggio has been selling three-wheelers in India since 2000 and it forayed into
scooters in 2012. However, it has a 1 per cent share in the domestic scooter
market where 5 million units were sold in the first nine months. It sold 50,493
units, growing 63 per cent year on year.

Graffi said the company is not interested in the market share as far as two-
wheelers are concerned. “We are focused on offering differentiated products
to our customers. I won’t call it premium, but unique compared to rest of the
market. Our aim is not to be a mass player at least in the next five years. This
is not our mission in two-wheelers,” he said.

The company sells scooters under the Vespa and Aprilia brands in India.
Vespa has strong recall in the Indian market owing to its former range of
scooters when Piaggio was manufacturing scooters with LML. The
partnership came to an end two decades ago, and Piaggio re-entered the
segment in 2012.

On electric mobility, Graffi said the company had technology for both three-
and two-wheelers, and would implement it for the Indian market when
required. “We are doing internal studies. The cost of the battery is still a
roadblock and infrastructure needs to be ready. Once it is implemented, it will
expand rapidly," he added.

27
  KEY COMPETITORS

Competitors For TVS Motor Company Ltd.

Company Current Price Book Value P/E Ratio Market Cap
(Rs. Cr.)

LML Ltd. 9.20 -106.41 0.00 75.43

Atul Auto Ltd. 421.45 82.24 24.78 924.80

Scooters India Ltd. 52.40 10.36 0.00 447.40

Kinetic Engineering Ltd. 88.50 10.09 0.00 148.07

Bajaj Auto Ltd. 3,099.25 588.67 23.43 89,682.07

Hero Honda Motors Ltd. 3,546.10 506.31 20.97 70,818.11

Maharashtra Scooters Ltd. 2,456.65 283.98 223.56 2,807.60

Majestic Auto Ltd. 175.25 153.52 0.00 182.22

COMPARISON WITH ATUL AUTO Ltd.

28
COMPARISON WITH BAJAJ AUTO Ltd.

29
 ENVIRONMENTAL SCANNING i.e. PEST (PESTEL) etc.

30
31
32
  PORTER FIVE FORCE MODEL OF COMPETITION

 
Background of the company
TVS Motor Company is the third largest two-wheeler manufacturer in India and one
among the top ten in the world, with annual turnover of more than USD 1.4 billion in
2011-2012, and is the flagship company of the, USD 7.29 billion, TVS Group. The
business ranges across automobile component manufacturing, components
distribution, manufacturing of powered two-wheelers, computer peripherals, financial
services, contract manufacturing services and software development. TVS Motor
Company Ltd (TVS Motor), member of the TVS group, is the largest company of the
group in terms of size and turnover. The TVS group has today emerged as India's
leading player in the automobile and automotive components industries. The group
has 30 companies employing a workforce of around 40,000 people. TVS Motor
Company is the largest among the group companies in terms of size and turnover.
Today, TVS Motor Company has 4 manufacturing plants (Hour in Tamilnadu,
Mysore in Karnataka, Nalagarhin Himachal Pradesh- India and Karawang -
Indonesia)

33
 
 16% market share in the two-wheeler industry in India

 Product offerings in all segments of the two-wheeler industry in India

 Product offerings for the three-wheeler industry in India

 More than 15 million customers

 Products exported to more than 50 countries worldwide.

Resilience, can-do attitude, indomitable spirit to continuously better industry norms,

doing business with a human touch and putting customers at the forefront are some of
the salient features that best define Team TVS. The Company has been a competitive
player, constantly challenging industry standards and creating revolutionary
innovations. Take for example the many firsts that the Company has been
credited with, such as the deployment of a catalytic converter in a 100 cc motorcycle
or even the first four stroke 150cc motorcycle; both premiered from TVS Motor
Company. Also, there is the Apache, which in 2006 became the first Indian
motorcycle to win six prestigious awards in arrow and that too, immediately on being
launched. TVS Motor Company is committed to achieve total customer satisfaction
through excellence in quality, its management philosophy being based on five pillars
of TQM (Total Quality Management)-Management Commitment, Customer focus,
Quality Costs, Quality Systems and Continuous Improvement. TVS Motor Company
has international presence in more than 50 countries in Asian, African and Latin
American Continents and will enter more international markets in due course. In
India, the company functions through a strong network of sales, service, authorised
service enters and other certified service points
1(a)
PORTER’S 5 FORCES ANALYSIS
 
Porter’s five forces Model of Competition are as follows:
 

 
1. Rivalry among competing sellers

2. Potential new entrants

3. Substitute products

34
 4. Competitive pressures from supplier - seller relations: Bargaining power

5. Competitive pressures from seller-buyer relations: Bargaining power.

 Rivalry:
The key players in two-wheeler industries are Hero Honda motor ltd. (HHML), Bajaj
Auto ltd and TVS motor Company ltd. The other players are Kinetic, Loll,
Yamaha, Majestic auto ltd, Royal Enfield ltd and Honda motorcycle & scooter India.
Two-wheelers domestic market growth rate for 2008-09 is 76.49% which is very high
when compared to that of three-wheelers, Passenger and commercial vehicles.
The standardized product used in manufacturing of two-wheelers is steel, aluminium
and rubber, because there are many industries in India for manufacturing those
standardized product the production is going smooth. Sales of two-wheelers are very
high when compared to that of three wheelers, Passenger and commercial vehicles.
Indian Auto policy 2002 gives added advantage to two-wheeler manufacturers to
enter even other countries outside India. Since big manufacturer plant with high
technology and good R&D team needed many of them dose not enter in two two-
wheeler Industries. Only the companies which are in automobile line will expand their
product line like Mahindra.
Potential New Entrants:
 Capital investment is very huge in two-wheeler industries since large plant and large
machineries needed with skilled labours and good R&D team needed for producing
two-wheelers. Since high technology and raw material resources are abundant
to produce the production cost is less in producing two-wheelers.
Since each company in industry change the model ongoing basis to show
differentiation among their competitors because of this there is more learning and
experience in this field. Each company in industry not only makes differentiation in
their product strategy but also makes differentiation in the promotional strategy
To create” brand preference and loyalty”. Because of low cost production, this
industry enjoys
Good growth rate and profitability.

Substitute Product:
Substitute products for two-wheeler industries are bus transportation, Auto
transportation and even low-end cars, but people using two-wheelers can only use the
service of buses and auto as a substitute product. Sometimes low-end car is a
substitute product for the people using high-end motor cycles. Because nowadays
there is lot of segment in buses in urban areas and the private companies also
influenced very much, buses are available from normal buses to hi-tech ac buses
which is threat to two-wheeler industry. Since only two people can travel in a bike
most of them uses auto when they go out with their family and if they are affordable
to buy car will use car instead of auto. Since bus service has increased when
compared to five years back people who are aged above 45 years uses buses because
of their health condition. These are the substitute product available to two-wheelers.

Supplier – Seller Relations:

35
Since their selling units are very high in two-wheeler industry and because of
Many competitors supplier are very high. Since they change their models
ongoing basis they create good relationship between their suppliers. Some of the
components in two-wheeler industry are very common for all the two-wheeler
industries like steel, aluminium, tyres and tubes, these material are available
in abundant. This makes them to drive a smooth production of their finished products.

Seller – Buyer Relations:
 Buyer has added advantage than seller because there are five to six big popular
brands of two-wheelers are available in India, so that they can switch brand from one
another. Since full information is available to the buyers about their product details
and their prices buyers are fully aware of seller costs and products. Buyers are very
conscious in spending their money to purchase two-wheeler, because it attracts most
of the middle-
Income groups
Seller cannot price their product very high. Nowadays people go to unique brand
because of the good service they provide after purchase. Because service centres and
spare parts shop available to their customer very near to their place buyer sometimes
do not mind spending little money extra. These factors create good relationship
between them.

 PRODUCTS OF COMPANY

A Vehicle for Everyone

TVS Motor currently manufactures a wide range of two-wheelers. Take your
pick from mopeds to racing inspired motorcycles.
Motorcycles: (Apache Series, Victor, StaR City+, Sport, Max4R)
Scooters: (Ntorq, Jupiter, Wego, Scooty Zest 110, Scooty Pep +)
Mopeds: (XL 100, XL 100 Comfort and XL 100 Heavy Duty)

Finished Products

INSTALLED PRODUCTION SALES SALES VALUE (Rs

PRODUCT NAME UNITS CAPACITY QUANTITY QUANTITY Cr.)

36
Automobile - 2 & 3
Wheelers N.A. 0.00 0.00 0.00 12932.9600

Other Operating
Revenue N.A. 0.00 0.00 0.00 126.2400

Raw Materials N.A. 0.00 0.00 0.00 107.1700

Sale of services N.A. 0.00 0.00 0.00 23.6900

Engine Oils N.A. 0.00 0.00 0.00 0.0000

Accessories & Spares N.A. 0.00 0.00 0.00 0.0000

TVS SCOOTERS

37
38
TVS MOTORCYCLES

39
40
  4 Ps (PRODUCT, PRICE, PLACE & PROMOTION)

TVS Motors Marketing Mix

Product:
TVS caters to a wide range of automotive categories which include
mopeds (XL, Super XL, Super Heavy Duty, XL 100, XL 100 Comfort),
Scooters (TVS Scooty pep, Scooty zest 110, Wego 110, Jupiter), Motorcycles
(Sport, Start city +110, Victor 2016 Phoenix 125, TVS Apache RTR 160, 180,
200 and 200 4V) and 3 wheelers (King), which all come under the product
strategy in the marketing mix of TVS Motors. TVS has earnt a reputation of
producing very innovative solutions for its product lineup. It has innovated
such products as TVS 50, India’s first two seater moped, Scooty, India’s
first scooterette, TVS Champ, India’s first Digital Ignition, Apache, India’s
first bike to feature Anti Lock Braking System, Jive, first bike in India

41
without a clutch, Wego, first scooter featuring Body balance technology,
Victor, first indegeniously developed Indian bike. So catering to mass
markets as well as young working professionals, smart independent
women and sports oriented youngsters, TVS has a wide range of
products.TVS motors broad product categories include Domestic range,
three wheelers, Internationalrange. TVS motors is the only two wheeler
automobile which has its penetration all consumer segments. They
have products like Apache ATR which caters to sports segment, TVS super
XL to rural, Scooty pep to young and dynamic women, Flame and Star City to
working professional. Hence their product category meets the needs from
rural to urban life style. They also have their presence in three wheeler
segments. Recently they launched TVS Jive which is first clutch free bike.
Price:
TVS motors is one of the largest selling motorcycle brands in India. Strictly
keeping in mind the sentiments and value of Indians, TVS prices its
products competitively, undercutting the competition in case of Scooters,
scooterettes, and entry level motorcycles. Traditionally TVS has been
known for its value pricing for its spare parts too, many of which are used
in its own products. Since buyers of these segments have constantly
changing needs, TVS uses survival strategy to remain competitive. Thus,
mostly the pricing strategy in the marketing mix of TVS Motors is based on
competition. The hotly contested Rs50000 to Rs80000 segment sees a lot
of entrants each year but TVS continues to be profitable and drives home
good sales because of its pricing strategies. Through new tie ups with
financial institutions and launch of updated variants, TVS is able to attract
customers without raising its product prices.TVS motor, a unit of TVS
group is which is a 100 year old group is known for its strong values.
There pricing strategy varies according to product category and the consumer
segment. The pricing is often economical pricing with focus on quality and
Indian pricing values and sentiments.
Place:
TVS motorcycles have a strong distribution network. Boasting of an
extensive dealer network exceeding 2000 in most states of India, TVS has
presence which is bested only by competitors like Hero MotoCorp and
Bajaj. With manufacturing plants in Hour, Nalagarh, Mysore, Karawang,
Indonesia. With a strong focus on rural markets, TVS as a brand is etched
in the memories of those living in outskirts and rural areas and not just
cities and tier 1 towns. The wide dealership network is the place strategy
in the marketing mix of TVS Motors, Licensed showrooms apart from
authorized dealerships also stock and sell TVS vehicles, sometimes paired
with finance and loan schemes. Service camps are also organized in the
hinterland for even better rural penetration and reach. TVS motors have

42
around 2000 country wide main dealer show rooms and service stations
attached to it. Manufacturing plants of TVS are located at Hour, Mysore,
Nalagarh and Karawang in Indonesia. There are also sub dealers who are
engaged in selling multiple brands in their show rooms with proper
agreements.
Promotion:
TVS has been able to strengthen its brand in India with extensive
marketing. It has clearly understood its segmentation and positioning and
directs its promotional activities to specific target audiences. A multi-
faceted strategy of communications with a strong online presence helps it
to gain leverage as far as back of the mind recall is concerned. Good
media relations, and carefully targeted advertising campaigns as a part of
the promotional strategy in the marketing mix of TVS, further help build
the brand to grow. Comprehensive brochures, ATL advertising, standees,
direct emailers etc. all help boost TVS sales. Hence, all these points
summarize the marketing mix of TVS Motors.The promotional strategies
involve placing brand ambassadors for each product specific
to geographic division (North India and South India).Virat Kohli, Dhoni for
North India, Actor Surya and Trisha for south India. The promotional activities
include dirt bike rally, MRF super cross championship rally promotional events
in Malls etc. TVS motors majorly concentrates on rural markets.

43
  STP (Segmentation, Targeting, Positioning)

STP

Segment Middle-class people who want a bike that is stylish and gives a good mileage

Target Group Middle class youth from the age bracket of 25-35

Positioning Bikes which will bring a smile in the lives of customers

SEGMENTATION
Market segmentation is the segmentation of markets into homogenous groups of
customers, each of them reacting differently to promotion, communication, pricing
and other variables of the marketing mix. Market segments should be formed in that
way that differences between buyers within each segment are as small as possible.
Thus, every segment can be addressed with an individually targeted marketing mix.
Why Segmentation
The importance of market segmentation results from the fact that the buyers of a
product or service are no homogeneous group. Actually every buyer has individual
needs, preferences, resources and behaviours. Since it is virtually impossible to cater
for every customer's individual characteristics. 47 marketers group customers to
market segment by variables they have in common. These common characteristics
allow developing a standardized marketing mix for all customers in this segment.
Bases for segmenting consumer markets there are a huge number of variables that
could be used for market segmentation in theory. They comprise easy to determine
demographic factors as well as variables on user behaviour or customer preferences.
In addition there are differences between private customers and businesses.
Geographic:

44
  Land or region
 Rural or metropolitan area
Demographic
 Age, sex, marital status
 Income, occupation, education
 Religion, nationality, ethnical group
Psycho-graphic
 Social status
 Lifestyle-type
 Personal type

Behavioural
 Intensity of product use
 Brand loyalty

45
  DISTRIBUTION CHANNEL

Supply Chain Decisions

We classify the decisions for supply chain management into two broad
categories -- strategic and operational. As the term implies, strategic
decisions are made typically over a longer time horizon. These are closely
linked to the corporate strategy (they sometimes {\it are} the corporate
strategy), and guide supply chain policies from a design perspective. On
the other hand, operational decisions are short term, and focus on
activities over a day-to-day basis. The effort in these type of decisions is to
effectively and efficiently manage the TVS flow in the "strategically"
planned supply chain.
There are four major decision areas in supply chain management: 1)
location, 2) TVSion, 3) inventory, and 4) transportation (distribution), and
there are both strategic and operational elements in each of these
decision areas.

Location Decisions

The geographic placement of TVSion facilities, stocking points, and

sourcing points is the natural first step in creating a supply chain. The
location of facilities involves a commitment of resources to a long-term
plan. Once the size, number, and location of these are determined, so are
the possible paths by which the TVS flows through to the final customer.
These decisions are of great significance to a firm since they represent the
basic strategy for accessing customer markets, and will have a

46
considerable impact on revenue, cost, and level of service. These
decisions should be determined by an optimization routine that considers
TVSion costs, taxes, duties and duty drawback, tariffs, local content,
distribution costs, TVSion limitations, etc. (See Arntzen, Brown, Harrison
and Trafton [1995] for a thorough discussion of these aspects.) Although
location decisions are primarily strategic, they also have implications on
an operational level.

TVSion Decisions

The strategic decisions include what TVSs to produce, and which plants to
produce them in, allocation of suppliers to plants, plants to DC's, and DC's
to customer markets. As before, these decisions have a big impact on the
revenues, costs and customer service levels of the firm. These decisions
assume the existence of the facilities, but determine the exact path(s)
through which a TVS flows to and from these facilities. Another critical
issue is the capacity of the manufacturing facilities--and this largely
depends the degree of vertical integration within the firm. Operational
decisions focus on detailed TVSion scheduling. These decisions include
the construction of the master TVSion schedules, scheduling TVSion on
machines, and equipment maintenance. Other considerations include
workload balancing, and quality control measures at a TVSion facility.

Inventory Decisions

These refer to means by which inventories are managed. Inventories exist

at every stage of the supply chain as either raw materials, semi-finished or
finished goods. They can also be in-process between locations. Their
primary purpose to buffer against any uncertainty that might exist in the
supply chain. Since holding of inventories can cost anywhere between 20
to 40 percent of their value, their efficient management is critical in supply
chain operations. It is strategic in the sense that top management sets
goals. However, most researchers have approached the management of
inventory from an operational perspective. These include deployment
strategies (push versus pull), control policies --- the determination of the
optimal levels of order quantities and reorder points, and setting safety
stock levels, at each stocking location. These levels are critical, since they
are primary determinants of customer service levels.

Transportation Decisions

The mode choice aspect of these decisions are the more strategic ones.
These are closely linked to the inventory decisions, since the best choice
of mode is often found by trading-off the cost of using the particular

47
mode of transport with the indirect cost of inventory associated with that
mode. While air shipments may be fast, reliable, and warrant lesser safety
stocks, they are expensive. Meanwhile shipping by sea or rail may be
much cheaper, but they necessitate holding relatively large amounts of
inventory to buffer against the inherent uncertainty associated with them.
Therefore customer service levels, and geographic location play vital roles
in such decisions. Since transportation is more than 30 percent of the
logistics costs, operating efficiently makes good economic sense.
Shipment sizes (consolidated bulk shipments versus Lot-for-Lot), routing
and scheduling of equipment are key in effective management of the
firm's transport strategy.

48
  PROMOTION STRATEGIES

IN GENERAL PROMOTION FALLS IN TO THREE MAIN CATEGORIES: Final Customer

Promotion Manufacturer Promotion to the channels or Trade Promotion. Channel
originated Promotion, or Retailer Promotion. Final Customer Promotion comes
directly to the Customer from the manufacturer. Trade Promotion, in contrast, is
directed at intermediate channels of distribution in an attempt both to get them to
buy more of a product and to commit their own effort to "pushing" the product
through the nest channel and ultimately to the consumer. Channel-originated
Promotions are run by the channel itself to either the next channel in the
distribution chain or to final Customers. For consumer packaged goods sold through
supermarkets, retailer Promotions are an especially visible form of Promotions.
Displays, feature advertising, and price deals (price cuts, free merchandise, and
retailer-issued coupons) all affect sales and profits and either augment or detract
from manufacturers direct Customer Promotions. In general, the purpose of channel
Promotions is to increase sales of all products to the Customer. Promotion objectives
and programs may be gathering offensive, or defensive. Offensive Promotion
attempt to gain an advantage through exclusively: being the only company to offer a
particular Promotion or level of Promotion support. In most markets, however,
competitors quickly match Promotions. On top of that, in some areas, notably
consumer packaged goods; the channels have become sufficiently powerful to both
demand and schedule Promotions. The result is that companies, including those with
household brand names and dominant market shares, are promoting due more to a
perceived necessity to match competition and satisfy the channels than to a
conviction that Promotions benefit the manufacturer. Many types of consumer
products, service and industrial products use sales promotion devices extensively.
Short-term price discounts to consumers are very common in industrial markets. In
addition, farm equipment and office Products manufacturers, for example,
frequently target channel members for promotions which may or may not passed on
to the customers.

49
 SOURCES OF FINANCE

50
Quarterly results in brief
(Rs crore)

Dec' 17 Sep' 17 Jun' 17 Mar' 17 Dec' 16

Sales 3,684.95 4,052.44 3,399.51 2,844.50 2,983.38

Operating profit 286.79 350.33 211.42 161.51 218.49

Interest 12.17 15.48 10.72 13.24 11.52

Gross profit 292.78 380.40 257.78 211.47 241.77

EPS (Rs) 3.25 4.49 2.73 2.67 2.79

Quarterly  results in details

Dec' 17 Sep' 17 Jun' 17 Mar' 17 Dec' 16

Other income 18.16 45.55 57.08 63.20 34.80

Stock adjustment 141.94 -148.96 -5.35 29.55 -59.51

Raw material 2,484.92 3,076.52 2,444.40 2,016.93 2,139.29

Power and fuel - - - - -

Employee expenses 211.84 219.92 209.03 173.73 191.90

Excise - - - - -

Admin and selling expenses - - - - -

Research and development expenses - - - - -

Expenses capitalised - - - - -

Other expenses 559.46 554.63 540.01 462.78 493.21

Provisions made - - - - -

Depreciation 82.42 83.61 78.34 77.45 71.97

Taxation 56.01 83.63 49.97 7.25 37.13

Net profit / loss 154.35 213.16 129.47 126.77 132.67

Extra-ordinary item - - - - -

Prior year adjustments - - - - -

Equity capital 47.51 47.51 47.51 47.51 47.51

Equity dividend rate - - - - -

Agg.of non-prom. shares (Lacs) - - - - -

Agg.of non promotoholding (%) - - - - -

OPM (%) 7.78 8.64 6.22 5.68 7.32

GPM (%) 7.91 9.28 7.46 7.27 8.01

NPM (%) 4.17 5.20 3.75 4.36 4.40

51
Key Financial Figures

Consolidated (Rs. Cr)

Particulars FY FY FY 2015 FY 2016  FY 2017

2013 2014

Total Income from 7,406.2 8,379.0 10,311.6 11,516.3 13,573.8

Operations 2 1 8 4  9 

Expenses 6,967.8 7,892.0 9,708.75 10,758.6 12,705.1

8 6 6  3 

Earnings Before Other 438.34 486.95 602.93 757.68  868.76

Income, Interest, Tax
and Depreciation
(Operating Profit)

Depreciation 175.60 148.96 178.59 216.29  316.82

Finance Costs 103.41 80.09 62.11 67.51  59.62  

Other income 24.17 26.66 23.66 38.54  165.44

Exceptional items (92.78) (17.95) (58.27) –  – 

PBT 276.28 302.51 444.16 512.42  657.76  

Tax 91.36 118.57 123.94 147.97  148.67  

Extraordinary items (13.43) (2.94) – –  – 

PAT (before Minority 198.35 186.88 320.22 364.45  509.09  

Interest and share of
Associates)

Profit/ (loss) attributable 0.96 1.17 – –  – 

to Minority Interest

52
Share of profit / (loss) of (0.33) (0.59) (8.04) (4.88)  (0.20) 
Associates

Consolidated Profit / 197.72 186.30 328.26 369.33  509.29  

(Loss) for the year

 RATIO ANALYSIS

Parameter MAR'17 MAR'16

Operational & Financial Ratios:

   Earnings Per Share (Rs) 11.75 10.30

   DPS(Rs) 2.50 2.50

   Book NAV/Share(Rs) 50.69 41.22

Margin Ratios:

   Yield on Advances 0.00 0.00

53
   Yield on Investments 0.00 0.00

   Cost of Liabilities 0.00 0.00

   NIM 0.00 0.00

   Interest Spread 0.00 0.00

Performance Ratios:

   ROA(%) 10.28 10.24

   ROE(%) 25.56 27.15

   ROCE(%) 23.21 24.68

Efficiency Ratios:

   Cost Income Ratio 0.00 0.00

   Core Cost Income Ratio 0.00 0.00

   Operating Costs to Assets 0.00 0.00

Capitalisation Ratios:

   Tier 1 ratio 0.00 0.00

   Tier 2 ratio 0.00 0.00

   CAR 0.00 0.00

Valuation Parameters:

   PER(x) 36.74 31.33

   PCE(x) 24.24 21.13

   Price / Book(x) 8.51 7.83

   Yield(%) 0.58 0.77

   EV / Net Sales(x) 1.78 1.46

   EV / Core EBITDA(x) 20.97 17.75

   EV / EBIT(x) 29.09 23.94

54
    EV / CE(x) 3.66 3.28

   M Cap / Sales 1.69 1.38

Growth Ratio:

   Core Operating Income Growth -9.81 66.88

   Operating Profit Growth 12.77 43.06

   Net Profit Growth 14.06 40.67

   BVPS Growth 22.98 19.02

   Advances Growth 0.00 0.00

   EPS Growth (%) 14.06 40.67

Liquidity Ratios:

   Loans / Deposits(x) 0.00 0.00

   Total Debt / Equity(x) 0.00 0.00

   Current Ratio(x) 0.00 0.00

   Quick Ratio(x) 0.00 0.00

   Total Debt / Map(x) 0.00 0.00

   Net NPA in Rest. Million 0.00 0.00

 NET PROFIT/ BALANCE SHEET (FROM ANNUAL REPORT) -

ANALAYSE
BALANCE SHEET

Parameter MAR'17  MAR'16 YoY

55
 (₹ Cr.) (₹ Cr.) %Change

EQUITY AND LIABILITIES

Share Capital 47.51 47.51 0.00%

Share Warrants & Outstandings

2,360.8 1,910.8
Total Reserves 23.55%
2 3

2,408.3 1,958.3
Shareholder's Funds 22.98%
3 4

Long-Term Borrowings 0.00 0.00 0.00%

Secured Loans 264.11 267.53 -1.28%

Unsecured Loans 204.65 226.70 -9.73%

Deferred Tax Assets / Liabilities 125.70 143.74 -12.55%

Other Long Term Liabilities 0.00 0.00 0.00%

Long Term Trade Payables 0.00 0.00 0.00%

Long Term Provisions 50.80 39.99 27.03%

Total Non-Current Liabilities 645.26 677.96 -4.82%

Current Liabilities

1,859.3 1,543.7
Trade Payables 20.45%
6 1

Other Current Liabilities 312.47 449.47 -30.48%

133.27
Short Term Borrowings 616.38 264.23 %

Short Term Provisions 62.87 58.47 7.53%

2,851.0 2,315.8
Total Current Liabilities 23.11%
8 8

5,904.6 4,952.1
Total Liabilities 19.23%
7 8

ASSETS

56
Non-Current Assets 0.00 0.00 0.00%

3,929.0 3,465.1
Gross Block 13.39%
0 4

1,945.1 1,745.5
Less: Accumulated Depreciation 11.43%
3 5

Less: Impairment of Assets 0.00 0.00 0.00%

1,983.8 1,719.5
Net Block 15.37%
7 9

Lease Adjustment A/c 0.00 0.00 0.00%

101.16
Capital Work in Progress 62.28 30.96 %

Intangible assets under development 0.00 0.00 0.00%

Pre-operative Expenses pending 0.00 0.00 0.00%

Assets in transit 0.00 0.00 0.00%

1,587.9 1,214.8
Non Current Investments 30.71%
0 6

Long Term Loans & Advances 80.80 97.39 -17.03%

Other Non Current Assets 2.93 3.01 -2.66%

3,717.7 3,065.8
Total Non-Current Assets 21.27%
8 1

Current Assets Loans & Advances

Currents Investments 0.00 0.00 0.00%

Inventories 966.95 696.33 38.86%

Sundry Debtors 723.77 578.03 25.21%

Cash and Bank 8.51 32.74 -74.01%

Other Current Assets 325.40 396.51 -17.93%

Short Term Loans and Advances 162.26 182.76 -11.22%

Total Current Assets 2,186.8 1,886.3 15.93%

57
 9 7

Net Current Assets (Including Current

-664.19 -429.51 54.64%
Investments)

Total Current Assets Excluding Current 2,186.8 1,886.3 15.93%

Investments 9 7

Miscellaneous Expenses not written off 0.00 0.00 0.00%

5,904.6 4,952.1
Total Assets 19.23%
7 8

Contingent Liabilities 113.51 149.71 -24.18%

1,107.2
Total Debt 924.39 19.78%
0

Book Value (in ₹) 50.69 41.22 22.98%

Adjusted Book Value (in ₹) 50.69 41.22 22.98%

58
 PERFORMANCE ANALYSIS OF THE COMPANY

59
60
  REASONS FOR DIVERSIFICATION OF A COMPANY

DIVERSIFICATION HELPS TVS MOTOR

TVS Motor Co. Ltd seems to be reaping the benefits of diversification, but
higher input costs are threatening to puncture its profitability.
In the past four years, as its market share in the motorcycle segment fell, TVS
has been aggressively selling scooters and three-wheelers. While sales in the
bike segment grew 40% from a year ago, sales of scooters and three-wheelers
grew faster.
TVS’ revenue for the three months ended December grew 51% from a year ago.
Its average realizations also improved 7% over the period, helped by a price
hike in November and an increasing proportion of sales in scooters and three-
wheelers.
However, operating profit expanded only 57%, while operating margin
improved to 6.55%, an increase of 24 basis points over December 2009.
That’s because TVS was stymied by rising input costs. Raw material cost as a
percentage of net sales rose to 76.8% in the December quarter against 68.5% a
year ago. Consequently, TVS’ revenue for the three months ended December
grew 51% from a year ago.
While net profit growth at Rs 55.75 crore was up 137% from a year ago, it was
pushed up by a Rs 7 crore increase in investment income and Rs 9 crore
savings on interest expenses.
These numbers were better than Street expectations only marginally. There
was thus not much investor reaction as the stock closed the day 0.98% up,
compared with a 0.36% gain for the Sensex.

61
Investor enthusiasm could have been dimmed by the headwinds facing the
two-wheeler segment. Higher inflation and petrol price hikes make owning
and operating a two-wheeler costlier, thus crimping demand, while sales
might also cool off a bit on a higher base. Rising commodity prices are also an
increasing worry—operating margins are down sequentially for both TVS and
Bajaj Auto Ltd —that could hurt on costs.
TVS’ Indonesian operations, too, are not expected to contribute till 2012.
However, the stock is trading at a discounted valuation to its peers. Another
factor in TVS’ favour is its increasing non-bike portfolio.
Scooters are the fastest growing category among two-wheelers, at 52% this
fiscal, and TVS has the second largest market share in the category. Three-
wheelers, too, are growing at a healthy 23%. As of now these segments are
small compared with motorcycle sales for TVS, but they are increasingly
making up for a greater proportion of volumes.
BofA Merrill Lynch Global Research estimates bikes to account for only
42% of sales this fiscal compared with 51% two years ago. Scooters and three-
wheelers are better margin products and could well revive investor interest in
the TVS stock.

TVS MOTOR REGISTERS 39% GROWTH IN DECEMBER 2017 

Chennai based TVS Motor CompanyBSE -0.06 % registered a cumulative
sales growth of 39% in December to log volumes of 2.56 lakh units. 

The total two wheeler sales registered a growth of 38% with volumes of 2.47
lakh units, out of which domestic volumes contributed about 2.07 lakh units,
registering a growth of 35%. 

Scooter sales grew by 50.5% to 83,640 units, whereas motorcycle sales

posted a higher growth of 64% with volumes of 95,281 units. 

The total exports for TVS MotorBSE -0.06 % grew 55.8% to 47,818 units in
December 2017, out of which two-wheeler exports jumped over 50% with
volumes of 39,852 units shipped in December 2017. 

The three-wheeler segment too posted a healthy growth of 72.1% rising to

9,279 units in December 2017.

 
TVS Motor records 16% growth in sales in May 2017

62
New Delhi: Chennai-based automaker TVS Motor Company posted a sales
growth of 16% during the month of May 2017, with total sales increasing from
243,783 units recorded in the month of May 2016 to 282,007 units in the
month of May 2017.

Total two-wheeler sales increased by 15.6% from 238,320 units recorded in

May 2016 to 275,426 units in May 2017. Domestic two-wheeler sales grew by
16.3% increase from 206,886 units in May 2016 to 240,527 units in May 2017.

Scooters sales of the Company grew by 30.9% increasing from 65,434 units
in May 2016 to 85,681 units in May 2017. Motorcycles sales grew by 22.3%
increasing from 96,485 units in the month of May 2016 to 118,014 units in
May 2017.

The Company's total exports grew by 14.3% from 35,545 units registered in
the month of May 2016 to 40,617 units in May 2017. Two-wheeler exports
grew by 11.0% increasing from 31,434 units in May 2016 to 34,899 units in
May 2017.

Three-wheeler of the Company grew by 20.5% increasing from 5,463 units

recorded in May 2016 to 6,581 units in May 2017

63
  COMMENT ON ORGANIZATIONAL LEADERSHIP

The Industry Leader

TVS Motor will be one among the top two two-wheeler manufacturers in India and
one among the top five two-wheeler manufacturers in Asia.

Global overview
TVS Motor will have profitable operations overseas especially in Asian markets,
capitalizing on the expertise developed in the areas of manufacturing, technology and
marketing. The thrust will be to achieve a significant share for international business
in the total turnover.

At the cutting edge

TVS Motor will hone and sustain its cutting edge of technology by constant
benchmarking against international leaders.

Committed to Total Quality

TVS Motor is committed to achieving a self-reviewing organization in perpetuity by
adopting TQM as a way of life. TVS Motor believes in the importance of the process.
People and projects will be evaluated both by their end results and the process
adopted.

64
The Human Factor
TVS Motor believes that people make an organization and that its well-being is
dependent on the commitment and growth of its people. There will be a sustained
effort through systematic training and planning career growth to develop employees'
talents and enhance job satisfaction. TVS Motor will create an enabling ambience
where the maximum self-actualisation of every employee is achieved. TVS Motor
will support and encourage the process of self-renewal in all its employees and
nurture their sense of self-worth.
Responsible Corporate Citizen
TVS Motor firmly believes in the integration of Safety, Health and Environmental
aspects with all business activities and ensures the protection of employees and
environment including development of surrounding communities. TVS Motor strives
for long-term relationships of mutual trust and interdependence with its customers,
employees, dealers, and suppliers.

‘Motivated workforce is a highly productive workforce’

People Matters talks to R. Ananda Krishnan, who is Senior Vice President

HR at TVS Motor Company with over 2 decades of experience. He talks
about innovative and booming HR strategies from the perspective of
automobile industry.
The interview revolves around vital topics such as evolution of HR function in years,
reinventing its approach, diversity at workplace etc. It also highlights key employee
benefit initiatives such as wellness taken by TVS Motor Company serving strength of
over 5,000 employees and several other key insights, read on…
You’ve been a part of HR community for long, how do you think HR function has
evolved in all these years? And According to you, how important is it for HR to
reinvent its approaches?
In current times, organizations operate in a complex business environment which
throws up numerous challenges at various levels. There is a need for the human
resource function to play a critical role in helping organizations navigate through the
dynamism for smooth operations and transitions. In order to play this role, HR will
have to increase its real and perceived value. Over the years HR has moved beyond
personnel management, routine activities such as the administration of payroll and
benefits to a more pivotal role such as developing people strategy and supporting
the organization’s business goals. HR has to hold itself accountable for driving the
business.
 
The HR should be able to benchmark itself and keep track of new technologies. Also
think of itself as a consulting function which will proactively push innovation and
change into the organization. The HR industry, particularly in India, has taken longer

65
to adjust to the use of HR technology. Several large companies have set up small but
committed teams within the HR function that focus on data analytics.
What are some of the exemplary initiatives taken by your company?
There are some definite changes we have adopted in TVS Motor over the past few
years. Some of them include use of learning, gamification and experiential case
studies during the employee selection process, use of data analysis to work on future
risk and attrition trend, conducting comprehensive exit interviews, use of auto
ergonomics (welfare) to take into account the health index and working style of an
individual on the shop floor and focus on capability at our dealer and supplier end
along with the front staff.
Major initiatives were taken in the wellness segment. We conducted periodical and
annual health check-ups for all employees, weight management, lifestyle coaching,
wellness consultation and workshops. Also, we introduced health cards for all
employees and their families. Pre-employment medical check-ups were also
conducted. Fully-functional OHC (Occupational Health Centre) and special clinics for
diabetes mellitus, hypertension and hyperlipidemia were opened. Outpatient
consultation and treatment and ophthalmological examination for truck drivers were
also planned. Walkathons, meditation and yoga classes were organized regularly.
Along with this, crèche for children was opened inside the premises. At TVS Motor
Company, we strive to ensure good health for all our employees and run various
wellness programs to accomplish that.
 
Employee wellness programs have become a staple in many corporations as a way to
attract top talent, encourage productiveness and limit attrition. An average
employee spends most of their waking hours at workplace making it crucial for
organizations to invest in wellness initiatives. Various studies globally and in the
APAC region support the fact that healthy and engaged employees perform better
and stay loyal. This trickles down to other aspects of their lives as well and
encourages holistic growth.
What are your views on the need for greater diversity in the workplace?
We believe an organization’s success depends on its ability to embrace diversity.
When people from diverse background work together, they naturally create an
environment that encourages innovation. Diversity encourages seeding and
exchange of multiple ideas. We have established regional diversity and are working
on expanding gender representation in our workforce to 25%. We are also targeting
higher women ratio for campus recruitments to maintain a healthy gender ratio. We
have facilities like Crèche’ for the benefit of employees which is attached to a
medical centre.
How crucial is employee engagement for any company?
Employee engagement always plays an important role in the success and growth of
an organization. Employee engagement is a two way process; the organization works
towards keeping employees engaged by providing them with the right environment,
challenges, learnings and incentives. In return, employees contribute through an
increase in productivity and improved performance, which results in better than
average organizational growth. 
What has really worked for you as a leader to create engagement and motivation
in the company?

66
 
A motivated workforce means a highly productive workforce which will help you
achieve your business goals. Thus, we have taken some proactive steps to motivate
our employees to maintain good health by appointing health champions from our
existing working staff.
According to a study by Bersin Group, 41% of the companies that encourage
colleagues to support one another experienced a significant increase in customer
satisfaction. Our health champions hold regular sessions, develop on-going links and
relationships with the community, inspire and encourage employees to uphold good
health so that they can reach their full potential.

 MARKET SHARE/ GROWTH RATE OF THE COMPANY

TVS bets on NTORQ to up market share

67
TVS Motor Company is eyeing a bigger share of the two-wheeler market with the
launch of TVS NTORQ 125. The two- and three-wheeler major, which introduced its
latest scooter here recently, said it expects to sell more than 2 lakh units of the model
next fiscal.

Predicting a trend towards growth of the scooter market in India, TVS Motor said the
segment, which accounted for 19-20 per cent (about 2.5 lakh units a month) of the
two-wheeler market in FY13, has now gone up to 33.5 per cent, or about 5.7 lakh
units a month.

Speaking on the side-lines of the launch of its new scooter here, Binoy Anthony,
General Manager, Marketing, TVS Motor Company, said: “From the data over the
past five years, we are seeing a distinct trend towards increasing preference for
scooters in India.

“In fact, this is more pronounced in some markets, with 40 per cent and above, against
33.5 per cent nationwide.”

“We expect to increase our overall market share in the two-wheeler business, both
motorcycles and scooters. The scooter segment in particular will grow significantly
with the new offering.”

He further said: “Contrary to general perception, our insights show that about 70 per
cent of the total scooter sales are accounted for by men. This also brings out a major
trend where the scooter segment as a category is growing at a rapid pace.”

68
He expressed hope that the new scooter, catering to a hitherto unaddressed segment,
will significantly add to the sales volumes of the company and increase its market
share.

TVS Motor and Suzuki take big strides in India’s surging scooter market

While the Jupiter has given a new charge to TVS' scooter fortunes, the Access is
powering Suzuki's charge.
In a manner similar to the SUV market in India, accelerating demand for
scooters is giving a leg up and more to the overall two-wheeler segment. For the
ongoing fiscal half-year (April-September 2017), total scooter sales were
3,577,421 units, which marks smart 17.26 percent year-on-year growth and
accounts for 34 percent of the total two-wheeler sales of 10,507,308 units
including 6,508,952 motorcycles (+7.71%) and 420,935 mopeds (-5.63%).
While this a marginal 2 percent increase in its share of the overall two-wheeler market
over the year-ago period, the growth road ahead points to a sharpening of demand for
scooters across the country. The continuous pace of growth for the segment has come
about as a result of new demand from rural markets, where women are slowly taking
to gearless scooters, as well as burgeoning demand from urban India and Tier 2 and 3
towns.
TVS is the new No 2 scooter market OEM
While Honda Motorcycle & Scooter India (HMSI) continues to hold sway over the
market by a massive margin – 2,098,354 units and 58.66 percent market share – with

69
its band of six scooters and  the soon-to-be-revealed Grazia, the big news is that TVS
Motor Co has gone past No. 2 player Hero MotoCorp in the scooter market share
stakes.
Thanks to growing demand for its flagship Jupiter, TVS now has a market share of
15.83 percent (566,362 units) compared to Hero MotoCorp’s 12.39 percent (443,321
units). A year ago (April-September 2016), the two rivals had an inverse relation:
Hero had 14.69 percent of the market and TVS was third with 13.14 percent. In a span
of a year, TVS’s scooter fortunes have seen a huge jump, rising 41 percent.
Suzuki Motorcycle India too is experiencing a similar rise in numbers. The two-
wheeler arm of the Japanese carmaker, which is now at No. 5 spot, has sold a total of
202,771 units in H1 FY2018 (+61%), riding mainly on demand for the Access 125
scooter and helping itself to an increase in market share: 5.67 percent in April-
September 2017 from 4.11 percent a year ago. 
Notably, Suzuki's scooter growth is coming on the back of a single model, the Access
125 which was relaunched last year after Auto Expo 2016. Since then, there has been
no looking back for this Suzuki on two wheels. The Access 125 has been the long-
time rival to the Honda Activa in the domestic market.    
At No. 4 is Yamaha Motor India with sales of 226,249 units in H1 FY2018, down 5
percent over sales of 238,241 units in April-September 2016.
Yamaha stands out as the only potential scooter manufacturer which is not aligned
with the market growth. Hence, as a result, it has visibly lost out on market share.   
Piaggio Vehicles, the No. 6 scooter OEM, is recording an uptick in its sales – 33,664
units that give it a market share of 0.94 percent, up marginally from the 0.55 percent
share it had in H1 2016.
Piaggio is expected to roll out a 125cc scooter under the popular Aprilia brand, which
has performed well for the company in the 150cc scooter category in the form of the
Aprilia SR150.  
In FY2017, the scooter segment sold a total of 5,604,601 units (+11.39%), accounting
for 32 percent of overall two-wheeler industry sales of 17,589,511 units including
motorcycles (11,094,543 / +3.68%) and mopeds (890,367 / +23.02%). Now, from the
looks of it, the scooter segment looks set to carve a speedy growth path of its own.
What’s more, with Hero MotoCorp, HMSI and TVS Motor Co all readying a gaggle
of 125cc scooters, things can turn only more exciting.

GROWTH RATE

70
Revenue or turnover or top line is income that a company receives from its
normal business activities. Revenue Growth is used to measure how fast a
company's business is expanding. The figure shows the annual rate of
increase/decrease in a company's revenue or sales growth in terms of
percentage change from the previous year.

An ideal company should have a steady upward trend. Year-over-year

performance is frequently used by investors seeking to gauge whether a
company's financial performance is improving or worsening.

Compound Annual Growth Rate of TVS Motor Company Ltd.

1 year

17.87
Revenue
%

Net Income 38%

EPS Basic 38%

71
Retained Earnings Growth is the percent increase / decrease of a company's
retained net income or reserves/surplus over time. A company can use
retained earnings to maintain current operations, or to invest in new ventures.
Generally speaking, retained earnings growth is accompanied by subsequent
increases in sales and profitability. 

TVS Motor Company posts 37% sales growth in February 2018 

TVS Motor Company BSE -0.06 % registered a sales growth of 37%

increasing from 211,470 units in February 2017 to 290,673 units in the month
of February 2018.
Two-Wheeler 
Total two-wheelers registered growth of 36.2% with sales increasing from
206,247 units in February 2017 to 280,942 units in February 2018. Domestic
two-wheelers recorded growth of 33.5% with sales increasing from 172,611
units in February 2017 to 230,353 units in February 2018. 

Scooter sales of the Company grew by 35.6% from 69,020 units in February
2017 to 93,573 units in February 2018. Motorcycles sales grew by 92.0% with
sales increasing from 58,994... 

Three-Wheeler

72
Three-wheeler sales of the Company grew by 86.3% increasing from 5,223
units in February 2017 to 9,731 units registered in February 2018. 

 SWOT ANALYSIS OF THE COMPANY

TVS Motor Company is a manufacturer and marketer of two-wheeler as well

as three-wheeler vehicles and has operations in India, Indonesia, Singapore
and some parts of Europe. TVS Motor Company is based out of Chennai,
Tamil Nadu, India and India is its major market. It is the third largest two-
wheeler vehicle manufacturer in India.

Strengths in the SWOT Analysis of TVS:

Multiple brands across portfolio: TVS offers 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.

73
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 FY2016. Thus, the company has improved its
financial conditions which enhance shareholder’s value and supports growth
plans.

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.

Weaknesses in the SWOT Analysis of TVS:

Lack of Scale: 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.

Opportunities in the SWOT Analysis of TVS:

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.

74
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 CAGR of 6.3% till
2019.

Threats in the SWOT Analysis of TVS:

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.

SWOT Analysis

1. Huge brand equity and one of the biggest players in the two wheel
market
2. Excellent R&D, and wide variety of products in every segment
3. Excellent distribution and good number of service centres
4. TVS Group has over 40,000 employees and a customer reach of ov
million
5. Associating itself with celebrity brand ambassadors
Strengths 6. ‘Scooty’ as a brand has become a second name for the scooterrate

Weaknesses 1. Absence in the premium  bike segment

1.Two-wheeler segment is one of the most growing industries

Opportunities 2.Export of bikes is limited i.e. untapped international markets

1. Strong competition from Indian as well as international brands

2. Dependence on government policies and rising fuel prices
Threats 3. Better public transport will affect two-wheeler sales

75
Strengths in The SWOT analysis of TVS Motors

Strengths are defined as what each business does best in its gamut
of operations which can give it an upper hand over its competitors. The
following are the strengths of TVS:

 Differentiation: In comparison to competition TVS Motors has always

maintained a price differentiation strategy choosing to offer economy
two-wheelers which are also high on performance and fuel efficiency.
 Focus on local market: TVS Motors won the trust and confidence of
the customer through their mopeds which primarily targeted the local
population. Even today the company relies primarily on the local
population for their business.
 Positioning: TVS Motors has always positioned their vehicles as
reliable and easy to use vehicles which can run on Indian terrain. They
are also well known for their string regional connect.
 Emotional Value: TVS has been able to connect emotionally with the
Indian audience primarily through their association with moped which
during the early days used to be the most popular mode of transport in
villages.
 Innovation: TVS Motors has been high on innovation and has a lot of
firsts to its credit. The company has always tried to stay in tune with the
latest trends in styling, performance and fuel efficiency, while also being
conscious about developing environmentally friendly vehicles that strictly
adhere to compliance norms.

Weaknesses in The SWOT analysis of TVS Motors

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Weaknesses are used to refer to areas where the business or
the brand needs improvement. Some of the key weaknesses of TVS Motors
are:

 Low profitability: The Company for the past few years have been

consistently registering low profitability and showing single-digit margins
in comparison to its competitors who are showing double-digit margins.
 Launch time: TVS Motors has faced criticism for the longer time it
takes to launch new vehicles. The company takes more time than their
competitors to introduce products into the market with the result that the
competitors get an upper hand over them giving them less time to react.
 Limited Global Reach: TVS Motors in comparison to competitors
like Honda have limited global reach and most of their focus is on
domestic markets.
 Poor advertisements: TVS Motors have never been aggressive in
advertising their products with the result that their products do not have
the brans recall or recognition enjoyed by market leaders like Bajaj
which are household names in India.

Opportunities in The SWOT analysis of TVS Motors

Opportunities refer to those avenues in the environment that surrounds the

business on which it can capitalize to increase its returns. Some of the
opportunities include:

 Market potential: Research indicates that India is going to be the

biggest market in the world for two-wheelers, with a market size of
48,000 units per day. This is going to be a huge opportunity for two-
wheeler companies.
 Improved roads: The central government in India has a plan for the
massive development of roads and related infrastructure in rural India
which will increase the demand for two-wheelers in villages. TVS Motors
which is already a popular brand due to their mopeds will find it simple
to capture this market.
 Change of trends: The growing number of dual-income households,
the increase in the need for smarter vehicle options to beat the crowded
city roads, and growth in rural infrastructure are all trends that will result
in a surge in two-wheeler sales.

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Threats in The SWOT analysis of TVS Motors

Threats are those factors in the environment which can be detrimental to the
growth of the business. Some of the threats include:

 Technology: Some of the emerging technology areas like robot-driven

cars, alternate energy vehicles, and interconnected traffic and safety
systems may affect the sale of two-wheelers since these are more
adapted towards bigger vehicles. Moreover, people may start preferring
four-wheelers due to safety reasons as well.
 Competition: TVS Motors in spite of continuous attempts have not
been able to beat their two nearest rivals Bajaj Auto and Honda Motor
Corp for the past many years and continues to retain its third spot only.
This can be a threat to the business in the long run as more new players
make a foray into the lucrative two-wheeler market.

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  FINDINGS
 In this organization there is good employer-employee relationship.
 It targets 100% of its employees to be involved in its continuous
improvementactivities by motivating them through various financi
al and non-financialincentives.
 There is a well integration of all the functional departments which
facilitates theuse of software like ERP .
  To solve work related problems, QC (Quality Circle) and cross
functional team aremade effective.
  Advertisement is given much importance.
 The company is increasing its global foot print by entering Asian
and Africanmarkets.
 The majority of the customers are satisfied with price of TVS

vehicles.

 The customers are highly satisfied with fuel consumption.

SUGGESTIONS

 Promotions activity must be improved through personal selling

promotion and advertising it should be create brand image of TVS
Vehicles reason that only 42% of respondents are satisfied about
brand image of TVS Vehicles.
 The company should take the steps to decrease the maintenance
cost of TVS vehicle and improve the lifetime of TVS MOTOR
COMPANY vehicles.
 To improve the credit facilities, reason that majority of consumers
are dissatisfied with credit facilities.
 The concern should introduce new color on TVS Vehicles, which
will attract more customers.

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  CONCLUSION
 Today, TVS MOTORS has become one of the larger and profitable
motor units in the Indian Automobile Industry. It has done his job
within a very short time by providing itself as an efficient unit.
 From the very beginning it has maintain high quality standard and
it has been approved by granting it ISO 9002. Now slowly it is
going towards the international market and has started to spread its
wings over there. It is slowly and steadily moving towards
the grand success.
 TVS MOTORS is not only enveloping its own firm, but is also
developing the Kodinar Taluka. It has awareness
towards environment by achieving zero level pollution.
 At last, I really feel very good, because I get best opportunity to
make project and get practical knowledge of TVS MOTORS it
has really played an important role in developing our country.

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