Delay in launch of Centra adversely affects TVS

The delay in the launch of 'Centra' the new four-stroke motorcycle from the Chennai-based TVS Motors could adversely affect the company's volume growth in 2004. TVS had planned to launch Centra in November 2003 but the launch was delayed by around three months. "This has adversely impacted our volume growth numbers and led us to scale down our volume estimates for 'Centra' to 20,000 units for FY04 from 75,000 units previously forecast,"says a company official.

Analysts have also revised their volume estimates. Enam Securities has revised the volume growth from 819,000 units to 719,000 units, implying zero year-on-year growth.

The company says the main reason for lower volume growth in its motorcycle sales has been because its competitors have been offering numerous freebies along with their models. There is also a significant drop in volumes of Max 100 because of strong competition from Hero Honda's Dawn and Bajaj's Boxer.

TVS witnessed lower-than-anticipated Victor volumes in October and November 2003 which are typically high volume festive season months for two-wheelers.

Enam Securities feels that TVS could see a marginal decline in its market share in the motorcycle segment in 2004. However, analysts are positive about the growth prospects of the company and say continue to remain positive on the company's ability to deliver quality products and capitalize on the strong double-digit growth that we envisage for the motorcycle industry.

Analysts estimate that motorcycle volumes will clock 994,000 units and operating margins will remain intact at 13.9 per cent till 2005.