Two-wheeler and three-wheeler manufacturer TVS Motor Company Ltd. is expecting the domestic two-wheeler industry to grow by about 6% and 8% during the current year against 5% reported last year, despite the prevailing uncertainty in the industry.
In a note to the shareholders, the company said that the industry’s growth would be impacted by higher year-end inventory across the industry, higher product costs due to escalated commodity prices of last year and advanced safety regulation implementation from April 2019. From April 2020, the industry would undertake a significant change in migrating from BS-IV to BS-VI emission norms. Hence, it added, in the second half of 2019-20, BS-VI transition would pose some challenges and that TVS Motor was gearing itself to meet the same.
The note also said that changing trade policies of USA, Brexit and unforeseen challenges in Chinese economy could lead to escalation of uncertainty in global economic growth.
Crude prices were expected to remain at the increased level of Q4 2018-19 during 2019-20 and might lead to higher costs for customers and original equipment manufacturers.
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While spelling out the risks and concerns, the company said that any negative deviation from normal monsoon would be a cause for concern.
The firm also said that uncertainty of demand due to upcoming emission regulation would be high in second half of 2019-20. In order to leapfrog from BS-IV to BS-VI emission norms in domestic market from April 2020, product readiness, supply chain readiness and dealership-readiness would be crucial.
TVS Motor was continuously monitoring international factors such as geo-political scenarios and rising crude oil prices for both risks and opportunities. The firm had recognised these risks and had developed action plans to mitigate the risks suitably.
TVS Motor plans to consolidate its gains further and grow ahead of the industry in the coming years as it had strong presence in all segments of two-wheeler industry, through planned new launches and expanded network of dealers.
