TVS Motor plans Rs 650cr capex in FY20, lines up new bike under BMW alliance

Chennai-based TVS Motor Company, India’s fourth largest two-wheeler maker, will inject Rs 650 crore as capital expenditure this financial year, a top company official has said.

Though the annual investment figure is less than the previous year's Rs 800 crore, it is largely in line with Street expectations. In FY18, the company's capex was Rs 450 crore.

Investments will be made towards the creation of additional capacity, new products and technology. The maker of Apache and Jupiter said the product launch pipeline includes an electric two-wheeler and also a second product under the BMW alliance.

TVS and German giant BMW have so far launched one product each under their respective brands (BMW had spun off one additional variant) since the two companies announced their non-equity partnership in 2013.

TVS launched the Apache RR 310 while BMW launched the G 310 GS and G 310 R. All three are built using a common platform, engine, and parts which were developed in India and Germany.

KN Radhakrishnan, President, CEO & Additional Whole-Time Director, TVS Motor Company, said, “Both the BMW products are doing extremely well, and the market acceptance of these products are very good. Now [our recent] product is also doing well. We are coming up with another model. Closer to launch there, [we can share] what exactly is the model."

According to BMW, 2018 saw sales of 1,640 units of both its bikes in India. The G 310 GS is priced at Rs 3.49 lakh while the G 310 R is priced at Rs 2.99 lakh (ex-showroom). TVS during the same year clocked sales of 5,297 of the Apache RR 310 which is priced at Rs 2.23 lakh.

Also on cards is the first electric vehicle by TVS which will be launched this financial year. Though there is no confirmation about the kind of vehicle it will be, it is expected to be the Creon electric scooter that was showcased by TVS at last year’s Auto Expo.

“We have invested in electric technology and this financial year, we are planning (for a launch). Closer to the launch we will share more details”, added Radhakrishnan.

An additional investment of Rs 200-250 crore will be made in the subsidiary, associate companies of TVS and for acquisitions. On May 8, the company announced an investment of $3.85 million (about Rs 27 crore) in a start-up company called TagBox.