TVS Motor scales down investment plans
India's third-largest two-wheeler manufacturer, TVS Motor Company Ltd. is scaling down its investment plans in India, owing to weaker demand and tight availability of consumer finance.
TVS, which was earlier planning to invest about Rs 1 billion per annum on expansion, will now only invest about Rs 750 million per year for the next two years. 'We have seen low growth and will only invest for new models and R&D projects now,' said Venu Srinivasan, Chairman and Managing Director, TVS Motor. 'There is no significant investment in capacity. Given the turbulent conditions, we would trim our investments,' he added.
TVS Motor had recorded a 19 percent increase in total two-wheeler sales in September this year, but the company expects growth to slow down in the near future, primarily due to lack of availability of finance. 'We don't expect improvements till the end of 2009, as the global economy is slowing down. The crisis in the west is affecting us here, nobody is really willing to lend,' said Srinivasan.
Hero Honda posted its highest net profit in five quarters
Racing ahead of main rival Bajaj Auto, Hero Honda continues to record an amazing performance this year, despite the overall recession in the Indian automotive market.
In fact, Hero Honda posted its highest net profit in five quarters, with a 50% increase in profit after tax (PAT) at Rs 306.3 crore for the quarter ended September 30, 2008. The company clocked Rs 204.3 crore in the same period last year, and Rs 298.7 crore in the fourth quarter of FY 2007.
Due to better cost control, more efficient work practices and higher sales, Hero Honda's operating profit margins also improved to 15.26% during the quarter, against 14.06% in the same period last year, and 12% in the first quarter.
Hero Honda's motorcycle and scooter sales went up by 29% during the quarter to 972,000 units, against last year's 756,000 units. The company sold 537,000 vehicles during the Diwali month in 2007, and aims to cross that mark this year with 600,000 units.
'We have posted the best-ever sales in the fiscal and are aiming to net the highest-ever sales in October. Our margins grew as a result of good sales volume and strong fiscal discipline. Cost-control and greater penetration in the market also helped bring in better profits. We have built a huge stock to attain the highest volume growth in the festive season. To meet the liquidity crunch in the market, we have entered into tie-ups with regional, rural and co-operative banks to meet customers' credit needs,' said Pawan Munjal, MD, Hero Honda.
Hero Honda, which currently has a 55% market share in the two-wheeler segment in India, recently launched four new variants of its existing bikes, and is expected to launch more variants and perhaps two or three all-new bikes by end-2009.
According to analysts and industry experts, Hero Honda's fundamentals are strong and it has posted impressive volume growth, outperforming the entire two-wheeler industry. The company improved its realization on the back of shifting bulk production to the tax-free zone in Haridwar, and its bottom line has grown with effective cost control management.
[Via: indiaautomotive]
Hero Honda launches new CBZ X-treme and new Pleasure
Hero Honda today launched new variant of Pleasure. The new pleasure is priced Rs36,950 and will add customers to the company's sales target of 6lakh units this month. "These launches are part of our strategy to boost sales during the festival season.
Last year during the festival period we sold about five lakh units, this year we are looking to better the mark," Hero Honda Motors Senior Vice-President (Marketing & Sales) Anil Dua said.
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