BSE-listed Tube Investments (TI), a division of the Rs 16,000-crore Murugappa Group, is targeting a 50 per cent jump in sales of its high-margin premium and foreign bicycle brands this fiscal.
The company is expecting a 7 per cent contribution to its revenues from this segment in FY11 and it is expected to increase to double digits at 12 per cent in FY12, a senior company official has said.
“A growth of 50 per cent (in the premium segment) is what we are looking at this year and it will definitely happen,” company’s General Manager (Marketing) Rajesh Mani told PTI here.
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The premium range cycles start from Rs 6,000 and go up to Rs 1 lakh per unit. “On the profitability front as well, the margins are far better in this segment as compared to the cheaper bikes,” Mr. Mani added.
TI Cycles recently launched its very own carbon frame cycle and is investing Rs 10 crore on the product.
“There is a lot of traction for cycling, especially among people in urban and semi-urban areas who have crossed 23, 24, 25 years and who are increasingly returning to cycling for fitness and its eco-friendliness,” Mr. Mani explained.
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Apart from its own brands like the Act and the carbon frame Montra, TI also sells established international brands such as Schwinn, GT, Canondale and Ducati, which are currently witnessing a growth of 100 per cent per year, Mani said.
“We expect the cycles to contribute 12 per cent to our top line this year, but in the next 3-4 years it should constitute a fair chunk of our business as people’s preferences change like it has happened abroad,” he said.
At present, 65 per cent of the company’s total revenue comes from the non-roadster segment such as the kids, SLRs and MTB segments with the balance comprising the roadster segment, Mr. Mani said.
Cities witnessing maximum growth in the premium segment currently are Pune, Chandigarh, Bangalore, Mysore, Coimbatore and Vijayawada, where the company is ramping up its distribution presence, he said.