TVS predicts 20% growth in motorcycles, 5% in moped sales in FY09

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New Delhi, Apr 17 (UNI) Despite predicting a flat or negative sales for the automotive sector for fiscal 2009, TVS Motors CMD Venu Srinivasan today expressed optimism that the company will see an increase of 20 per cent in motorcycles and five per cent in mopeds sales for FY09.

''We expect an increase of 20 per cent in motorcycles and five per cent in mopeds sales for FY09, while sales of scooters will be flat,'' company CMD Venu Srinivasan told reporters here.

Mr Srinivasan said TVS will start showing growth from April onwards. He informed the 13,000 Flame's left the showroom last month and expected it to increase to 15,000 units this year.

The company has been hit by a double whammy of sorts with the ongoing patent dispute with Bajaj over DTSi technology affecting its sales and higher input cost affecting its margins.

Mr Srinivasan said TVS suffered production and sales losses amounting to Rs 100 crore due to litigation with Bajaj on DTSi technology on its Flame motorcycle.

However, Mr Srinivasan sounded upbeat and said, ''The ongoing litigation is a intellectual property matter now and not a commercial matter. Our appeal will be heard by the Chennai High Court on April 23, 24 and 25.'' On pressures of a high input cost Mr Srinivasan said, ''Commodity prices are going up and unprecedented inflation of input material over last two years has meant cost push inflation for our business. Also tighter financing norm has hit us,'' said Mr Srinivasan.

He, however, declined to comment on a price hike on its products.

''It depends if the market can take it. Higher input cost will have effect on our margins since we cannot raise prices.'' The company also plans to launch two new two-wheelers in the Rs 40,000-premium category in the next 12 months. The company intends to launch its sub-one tonne commercial three wheeler in the next 18 months. The company had no plans to launch a four wheeler and only a four stroke passenger three wheeler is in the offing, he added.


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