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TVS Motor Company, India's third largest motorcycle
manufacturer, which has just built a plant here, is set to start
selling its bikes on the Indonesian market in early 2007.
"Initial production at our current plant will start in December," TVS
president director B.L.P. Simha said, referring to the US$43-million
manufacturing plant in Kerawang, West Java, which is located on a
20-hectare plot of land.
With a production capacity of 300,000 units per year, Simha said that
the company would focus first on motorcycles with small engine
capacities, popularly known here as bebek.
"We have decided to launch these types of motorcycles as they are the
ones used most commonly here by the people for their day-to-day
activities," Simha said.
Figures from the Indonesian Motorcycle Association shows that sales of
small-engined motorcycles accounted for 95 percent of overall sales
between January and August, which stood at 2.6 million units. In 2004
and 2005, the equivalent figures were 92 percent of total sales of 3.8
million units and 90 percent of total sales of 5.07 million.
Simha said that the company was upbeat it would be able to make inroads
into the tight Indonesian market, which is currently dominated by
Japanese producers.
As of September this year, some 3.1 million motorcycles had been sold,
with Honda holding a 51 percent market share, followed by Yamaha (32
percent), Suzuki (12 percent), and others (5 percent).
In 2005, total sales reached 5.07 million units.
To be able to compete with the Japanese giants, the company has built a
network of 60 dealers offering service and spare parts throughout
Indonesia, according to sales and marketing general manager K. Vijaya
Kumar.
The company also revealed an investment plan worth US$100 million over
three years to develop its research and development department so as to
help boost local content to 80 percent from 40 percent at present.
"Local support is necessary for growth because it will significantly
reduce production costs," Simha said, adding that TVS had decided to
make Indonesia the supply hub for its products throughout Southeast
Asia.
On Monday, the company also introduced its new board of commissioners,
headed by Nihal Kaviratne, the former president director and CEO of PT
Unilever Indonesia. Kuntoro Mangkusubroto, a former minister of energy
and mining, who currently heads the Aceh-Nias Reconstruction and
Rehabilitation Agency (BRR), and financial expert Rudjito are also
among the members of the board.
TVS Motor Company is the flagship company of India's TVS Group, which
is made up of 30 companies with total assets of $2.2 billion and 45,000
employees worldwide.
Beside TVS, another Indian motorcycle manufacturer, Bajaj, entered the
Indonesian market in early November.
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