TVS Suzuki to spend Rs 3 bn on new models - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

TVS Suzuki to spend Rs 3 bn on new models

Aug 24, 2000

Over the next three years, TVS Suzuki will be spending close to Rs 3 bn for new products and models in the two wheeler segment. The company has recently decided to phase out two of its motorcycle models the 'Shaolin' and the 'Shogun' due to a decline in sales and higher costs related to upgrading these bikes to meet emission norms. It has plans of launching 11 new models in the next three years. TVS Suzuki is a joint venture between Sundaram Clayton (TVS group) and Suzuki Motors, Japan. The company has a presence in all the two wheeler segments. The company's dynamic management, product launches, technical superiority and a well established network are its strengths. It reported a sales of Rs 16.2 bn for FY2000.

The company has plans of relaunching its four stroke scooter the 'Spectra'. The company had introduced the 'Spectra' model to the market in September 1998. However this model had not done well due to technical problems and its pricing, which was on the higher side. The company is also working on launching a new version of its four stroke bike the 'Fiero" in the current year.

TVS Suzuki volumes up 13% YoY in the 1QFY01
(no. of units sold) 1QFY00 1QFY01 % change
Motorcycles 75,796 89,074 18%
Moped 88,727 95,819 8%
Scooter 28,830 33,944 18%
Total 193,353 218,837 13%

This strategy of the company to concentrate on new product launches stems from the fact that competition in the two wheeler segment is picking up. Bajaj Auto Ltd has become an aggressive player in the motorcycle segment with its brands the 'Caliber' and 'Boxer'. In future too it has plans of launching two new models in 2000-01, the 'Pulsar' and 'Eliminator'.

As April'2000 emissions norms for two wheeler's in India clearly state, that two stroke models should either be phased out or upgraded to four stroke models by installing catalytic converters, the company has opted for the former.

Inspite of buoyant sales over the last couple of years, TVS's gross margins have been under pressure, due to higher marketing and raw material costs. As the company was not able to raise prices of its models due to low acceptance of some of them in the market, it has decided to phase them out.

The company's share price has fallen by 38% in the past six months and is currently trading at Rs 218.5 on a price to earnings multiple of 5.8 x FY2000 earnings.


Equitymaster requests your view! Post a comment on "TVS Suzuki to spend Rs 3 bn on new models". Click here!

  

More Views on News

TVS MOTORS Announces Quarterly Results (4QFY20); Net Profit Down 44.8% (Quarterly Result Update)

Jun 1, 2020 | Updated on Jun 1, 2020

For the quarter ended March 2020, TVS MOTORS has posted a net profit of Rs 739 m (down 44.8% YoY). Sales on the other hand came in at Rs 35 bn (down 20.6% YoY). Read on for a complete analysis of TVS MOTORS's quarterly results.

TVS MOTORS Announces Quarterly Results (3QFY20); Net Profit Down 32.1% (Quarterly Result Update)

Feb 5, 2020 | Updated on Feb 5, 2020

For the quarter ended December 2019, TVS MOTORS has posted a net profit of Rs 1 bn (down 32.1% YoY). Sales on the other hand came in at Rs 41 bn (down 11.5% YoY). Read on for a complete analysis of TVS MOTORS's quarterly results.

TVS MOTORS 2018-19 Annual Report Analysis (Annual Result Update)

Jun 27, 2019 | Updated on Jun 27, 2019

Here's an analysis of the annual report of TVS MOTORS for 2018-19. It includes a full income statement, balance sheet and cash flow analysis of TVS MOTORS. Also includes updates on the valuation of TVS MOTORS.

More Views on News

Most Popular

Why We Picked This Small-cap Stock for Our Hidden Treasure Subscribers (Profit Hunter)

Sep 17, 2020

This leading household brand will profit big time in a post covid world.

My Top Stock to Buy in this Market Selloff (Profit Hunter)

Sep 22, 2020

The recent correction offers a great opportunity to buy this high conviction smallcap stock.

Can the Nifty Fall to 10,200? (Fast Profits Daily)

Sep 24, 2020

The Nifty has reached an important support level today. If it breaks then we could see further downside.

What Do the Charts Say About Buying Smallcaps Now? (Fast Profits Daily)

Sep 18, 2020

Everyone seems to be excited about buying smallcaps now...but is it the right thing to do? What do the charts tell us? Find out in this video...

More

Covid-19 Proof
Multibagger Stocks

Covid19 Proof Multibaggers
Get this special report, authored by Equitymaster's top analysts now!
We will never sell or rent your email id.
Please read our Terms

TVS MOTORS SHARE PRICE


Sep 29, 2020 (Close)

TRACK TVS MOTORS

  • Track your investment in TVS MOTORS with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
  • Add To MyStocks

TVS MOTORS - VST TILLERS COMPARISON

COMPARE TVS MOTORS WITH

MARKET STATS