Wheels India, a TVS Group company, has gone in for a slew of new initiatives even as the economy is hurtling into a slowdown phase.
Launch of an aftermarket brand, rationalisation of production, and a re-look at the cost structure are among these initiatives.
Addressing presspersons here on Monday, Srivats Ram, Managing Director, said Wheels India, predominantly an OEM (original equipment manufacturer)-type player, had launched an aftermarket brand called ‘WILGO’.
He said Wheels India was keen to give a reliable and branded product with warranty.
“We are in the process of setting up four warehouses in different regions,” he said. Aftermarket business fetched the company sales of around Rs.20 crore last year.
“In the medium-term, we want to make this 5 per cent of our sales,” he said.
The company was also looking at production rationalisation across plants. “We want to ensure that we have production closer to the end-customers,” he said. This required shifting of capacities, and addition of new capacities in certain locations to optimise on logistics, he added. The company was also looking at cutting costs. “When you are having a market that is down, you really cannot influence the external environment beyond a point. You have to look internally and cut costs,” he said.
Marginal drop in profit
Fielding a range of questions, he said the company had already outlined an investment of Rs.70-80 crore for the year. “We are broadly in line with the plan,” he added. A part of it would go to expand the products capacity for the passenger car segment, and some would go to process change towards a new design in commercial vehicle.
In the meanwhile, the company reported a marginal drop in revenue for the quarter ended September 30, 2012, to Rs.496.95 crore from Rs.499.53 crore in the corresponding quarter of the previous year. Net profit, too, was down at Rs.8.60 crore (Rs.10.98 crore).
Exports totalled Rs.197 crore in the first-half. “Our attempt for the full year on the exports front is to reach the same amount as last year (Rs.321crore) in spite of a 40 per cent growth in the first-half,” he said. “This is because of the dramatic drop we are seeing currently. As a result, we will struggle to reach the last year’s number in terms of exports. I expect exports to improve only from the fourth quarter of next year,” he pointed out.
Given the slowdown in the commercial vehicle sector and the dramatic negative trend on the exports front, he expected sales to be 2-3 per cent less than last year.
