TWO & THREE WHEELERS
NO SPEED-BREAKERS FOR 2-WHEELER COS IN SECOND QUARTER
S.Hamsini Amritha
The Hindu Business Line
It has been a smooth ride for two-wheeler companies in the September 2009 quarter. The three major listed companies Hero Honda, Bajaj Auto and TVS Motors clocked strong profit growth: having managed to tempt customers with new launches that made the best of buoyant festival season demand. Interestingly, TVS Motors and Bajaj Auto launched new models in the three-wheeler segment also.
Sales pick up
Leading the pack is Hero Honda, which has posted an impressive 21 per cent growth in the number of vehicles sold in the quarter compared with last year. Better realisations saw the company register a healthy 26 per cent growth in net sales for the quarter. Though Bajaj Auto managed just about one-third of Hero Hondas volume growth, its net sales grew by 15 per cent for the quarter. Trailing its peers is TVS Motors, which clocked flat volumes.
Effect of launches
The picture changes if one is to consider the half-yearly performance. Though Hero Honda retains its leadership with volumes expanding 24 per cent year-on-year, TVS Motors has outdone Bajaj Auto. While TVS Motors managed a year-on-year sales growth of 10 per cent, Bajaj Auto is yet to regain its last years position as sales for first six months are still down.
The dip in sales clearly indicates that the aggressive launch of the Discover in mid-July, ahead of the festival season, helped Bajaj Auto make a comeback in the recently concluded quarter.
But this also reflects the adverse impact of Bajaj Autos earlier decision to exit the entry-level bike segment. Bajaj Autos sales in the 125-250 cc segment fell 7 per cent for the half-year ended September, despite the launches of the Pulsar 220 and new versions of the Pulsar 150 and the Pulsar 180.
Introduction of new models by India Yamaha Motor and Hero Honda in this segment has eaten into Bajaj Autos share in the premium bike segment. Nevertheless, one needs to remember that most of the launches happened in mid-October when the festival demand was nearing an end and the full effect of these launches is expected to trickle in the coming quarters. In the coming months, the rivalry between Bajaj Auto and TVS Motors may heighten when the latter starts to sell the Flame.
Money matter
Though on a net profit level, it may seem that TVS Motors has outperformed its rivals posting a 136 per cent growth (mainly helped by other income and tax credits of Rs 3.23 crore), on an operating profit level Bajaj Auto has done better than its peers.
While Hero Honda and TVS Motor saw a 15 per cent and 6 per cent increase in the cost of raw materials respectively, Bajaj Auto managed to keep this cost 3 per cent below last years levels due to its shorter-term contracts with suppliers. Higher realisations than rivals saw the company register a 94 per cent growth in operating profits this quarter.
With sales on a strong wicket, the key challenge for two-wheeler makers in the quarters ahead will be to sustain the volumes growth with new launches and keep the input costs low, especially as they all focus on executive and premium bikes. In addition, increasing export demand, particularly for Bajaj Auto, may expose the companies to a weakening dollar.
http://www.thehindubusinessline.com/2009/10/24/stories/2009102450850700.htm
TVS MOTOR NET DOUBLE TO RS 24 CR
The Economic Times
Chennai; TVS Motor, the countrys third largest twowheeler maker by sales has reported a net profit of Rs 24.55 crore for the second quarter ended September 2009, compared to Rs 10.40 crore in the same period last fiscal on the back of better sales, lower inventory and raw material cost.
All the brands have started doing extremely well. So, in terms of overall margins, compared to last year we are much better and we hope to do the same way in the future quarters, TVS Motor president KN Radhakrishnan told ET NOW after the companys board meeting in Bangalore on Friday. He did not give any guidance on the margins front, but said that it would become better next quarter.
During the second quarter, the companys net sales rose marginally to Rs 1,115.40 crore crore compared to Rs 1,015.07 crore in the year-ago quarter. In Q2, the company sold 3.91 lakh units, up by 4.7%, compared to 3.73 lakh units in the previous year. Exports, however, continued to decline, with the company selling 35,080 twowheeler units in the second quarter compared to 52,249 units in the previous year.
In the first six months, TVS-M reported a big jump in net profit at Rs 42.67 crore against Rs 17.42 crore in the same period last year. Net sales came to Rs 2,091.03 crore (Rs 1926.14 crore). The company reported a net profit of Rs 31.08 crore in the whole of 2008-09 on a net sales of Rs 3,670.92 crore.
About the overall volume growth, Mr Radhakrishnan said, The Q2 performance has been 5% in terms of numbers and Q3 performance will be certainly better than that. And in Q4 with two new products, we will be looking at better than industry growth.
During the quarter, the company also got a favourable verdict in its patent tussle against archrival Bajaj Auto over the twin-spark plug technology used in TVS Flame. After a long drawn out battle the Supreme Court allowed TVS to sell TVS Flame with the twin spark plug. TVS said it would take steps to obtain all necessary certifications under law before it starts selling its Flame brand of motorbikes.
On its overseas operations, Mr Radhakrishnan said, The Indonesian operations are better compared last year but it is taking little longer time than we expected because 98% is the Japanese market. So it is taking time to establish but the good news is that our product has been accepted and much better than last year.
In the coming quarter, the company will launch two new products. A new motorcycle will be added in the executive segment and a scooter, TVS- M said in a statement.
Copyright 2009, Bennett, Coleman & Co. Ltd. All Rights Reserved"
TVS Motor post-tax profit more than doubles
The Hindu Business Line
http://www.thehindubusinessline.com/2009/10/24/stories/2009102450520200.htm
Higher sales help propel TVS Motor PAT by 100%
The Financial Express
http://www.financialexpress.com/news/higher-sales-help-propel-tvs-motor-pat-by-100/532468/
TVS Motor Q2 profit rises to Rs. 25 crore
The Hindu
http://www.hindu.com/2009/10/24/stories/2009102461601300.htm
Higher sales help propel TVS Motor PAT by 100%
Yahoo India
http://in.biz.yahoo.com/091023/50/bauf0w.html
TVS net up at Rs 25cr
The Times of India
http://timesofindia.indiatimes.com/business/india-business/TVS-net-up-at-Rs-25cr/articleshow/5154849.cms
TVS net rises, sales tumble
Asian Age
HONDA SUPPLY HIT BY LABOUR STIR, DEALERS TURN AWAY CUSTOMERS
Swaraj Baggonkar
Business Standard
Mumbai: Pressure is mounting on Honda Motorcycle and Scooters India (HMSI), India's fourth biggest two-wheeler maker by volume, to resume normal supplies of scooters and motorcycles to its dealers, who are forced to ask customers to wait for up to four-five months for delivery.
The company has had a long pay dispute with labour unions which has heavily affected production for the past month at its plant in Manesar, Haryana. Monthly production has dropped to about 55,000 units from the usual 110,000 units. The dispute is yet to be resolved.
A customer of the Activa 110, a top-selling ungeared scooter brand from HMSI, will only be able to ride on his purchase by February or even March if the booking is made now. The company was in the process of jacking up capacity for the model, which it launched towards the end of March this year, when it was hit by the labour trouble.
A city-based dealer of Honda in the suburban area said, As the supply itself from the company is down drastically, we are forced to ask customers to wait for a maximum of four-five months for the Activa. Even other models such as Unicorn (a 150cc motorcycle) carry a waiting period of two-three months, while a buyer of the CBF Stunner (a 125cc motorcycle) will have to wait a bit longer.
Officials at HMSI appear uncertain on reaching an early settlement with their workforce. We are constantly in dialogue with the workers but do not know how long it will take for the matter to get completely resolved. Production has been hit badly and its not only Honda getting affected but every company attached to it is hit, including our suppliers, said a senior executive from the company. Agitating workers are demanding more pay, including an increase in the fixed portion of the salary structure, apart from other incentives. HMSI officials say this is unacceptable.
The loss in supply of HMSI models in the market has resulted in demand moving in favour of those from competing companies like Suzuki Motorcycle India and Mahindra Two Wheelers for the scooter range and Bajaj Auto, Hero Honda and Yamaha for the motorcycle range.
There has been an increase of 10-20 per cent in demand for our models, especially the Rodeo over the past two-three weeks. We have got ready delivery of our products, whereas Honda dealers are asking customers to wait for five months, said a dealer from Mahindra Two Wheelers.
A North Mumbai-based dealer selling Suzuki automatic scooters also said there had been a sudden increase of 10-12 per cent in sales over recent weeks.
Analysts say since customers were keen to make their purchase during the festive period, they were not expecting to be asked to wait for months for the delivery of the vehicle, even as their bank sends them notices to start paying the equated monthly instalments (EMIs)
Anticipating the strong demand in the festive season, HMSI had ramped up its production in June, July and August but the inventory had got exhausted by the start of October. According to data from the Society of Indian Automobile Manufacturers, HMSI's production was down by nearly five per cent in September to 84,182 units and a full 50 per cent this month.
http://www.business-standard.com/india/news/honda-supply-hit-by-labour-stir-dealers-turn-away-customers/374158/
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