TVS MOTORS PLANS TO RATIONALIZE NUMBER OF PLATFORMS AND INCREASE USE OF CHINESE SOURCED PARTS
TVS Motors will embark upon a new strategy, in a bid to cut costs and build more competitively priced two wheelers. To do this, the South Indian two wheeler major plans to rationalize the number of platforms and use lesser priced Chinese sourced parts in its products. This move from TVS comes at a time when its market share has been slipping over the past few months with sagging sales. Platform sharing is something that the car makers have used to very good effect and the trend seems to be catching on with the two wheeler industry as well, given that competitive pressures are always increasing.
TVS Motors plans to reduce the number of platforms, by building more two wheelers on common platforms. This essentially forms the basis of platform rationalization. This approach will lead to the usage of more common parts. Use of a higher proportion of common parts across many two wheelers means that TVS Motors will be able to buy the parts at a cheaper price, due to economies of scale. This will in turn mean that profitability will increase even as TVS manages to pass on some proportion of the cost benefit to the two wheeler buyer.
In the coming years. TVS Motors will launch more products under existing brand names and platforms rather than launching two wheelers on separate platforms. The first of such products will be the TVS Phoenix 125 commuter motorcycle, which uses many common parts scavenged from the Star City platform that already underpins a range of 110cc commuter motorcycles in TVS’ range. TVS will also relaunch one of its most successful commuter motorcycles the Victor in the coming months and this too is expected to use many common parts.
Apart from platform rationalization, TVS plans to source parts from Chinese manufacturers. While there is a perception of Chinese made goods being below par when it comes to quality levels, this is not true of products which pass through strict quality checks. In fact many high end components used in cutting edge devices and automobiles are sourced from China. For instance, Apple sources many of its parts for the iPhone and the iPad from Chine. Similarly, TVS Motors also plans to source low price-high quality products from China and improve its profitability. Click here to read about TVS Motor’ upcoming launch, the Phoenix 125cc motorcycle.
TVS Motors plans to rationalize number of platforms and increase use of Chinese sourced parts | IndianCarsBikes.in