TVS Motor Company Limited has informed the Exchange about Transcript of Analysts/Institutional Investor Meet/Con. Call
BSE Limited, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai 400 001. Scrip code: 532343
Dear Sir(s)/Madam,
5th December 2022
National Stock Exchange of India Ltd Exchange Plaza, 5th Floor, Bandra-Kurla Complex, Bandra (E), Mumbai 400 051. Scrip code: TVSMOTOR
Reg
: Compliance under Regulation 30 of SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015
In continuation to our intimations dated 28th November 2022 with respect to the schedule of a conference call with fund house and intimation on the recordings, respectively, we wish to inform that the transcript copy of the said recording is enclosed and the same is hosted on the website of the Company in the below mentioned:
https://www.tvsmotor.com/en/Investors/Communication
Kindly acknowledge receipt.
Thanking You,
Yours faithfully For TVS MOTOR COMPANY LIMITED
K S Srinivasan Company Secretary
Encl. a/a
Website : www.tvsmotor.com Email : contactus@tvsmotor.com CIN : L35921TN1992PLC022845
TVS Motor Company Limited Management Call with Spark Capital
November 28, 2022
Speaker 1
Hello.
Speaker 1
Morning Jenna.
Speaker 1
Look up to see them. Yeah, I'm able to see. I'm able to see. Ohh sure. Uh.
Speaker 2
From Spark so we have. From new
one on we have so Saurabh and so
Speaker 2
you can just probably just give a quick introduction and.
Speaker 2
Hi, good afternoon. Thank you for taking the time to meet us and really appreciate your time. Uh just a quick background on
Speaker 3
you one and then we can jump into TBS. Newnan was started in
Speaker 4
2004 by Arshad Zakaria. We've
been long term investors in
Speaker 4
India. You know one of the few
funds that have gone through the
Speaker 4
ups and downs of the cycles over
the last 20 odd years. You know
Speaker 3
we started as a multi asset fund
doing public privates and real
Speaker 3
estate, but over the last 10
years we've basically skewed
Speaker 3
towards doing.
Speaker 1
Republic marketing, investing
and so we like to pay sort of
Speaker 1
thematics in India long term,
sort of two to three years old.
Speaker 1
We don't really short any
stocks. So you know ours is a
Speaker 1
long bias to India Focus fund.
Speaker 2
And you know, that's sort of a
sort of thesis.
Speaker 2
We wanted to spend some time
with you and understanding
Speaker 3
what's happening in the two week
space and particularly you know
Speaker 3
from your perspective how do you
see the Ed cycle play out?
Speaker 2
And you know, just.
Speaker 3
Basically you know pick your
brains and learn from you about
Speaker 3
the you know the two week cycle
has been a great, great cycle I
Speaker 3
mean great industry for in India
over the last 20 years. But the
Speaker 2
question is we into a transition
phase and how do how do you guys
Speaker 3
see it play out over the next
few years.
Speaker 3
Can I? Would you like to?
Speaker 3
Something. Something. Sorry,
something urgent. So I just sent
Speaker 2
a message. Yeah, take your time.
Speaker 2
Uh, see Evie um, as we speak.
Uh, uh.
Speaker 1
The transition to EV is uh, real
uh. Of course, there are a lot
Speaker 1
of support from the government
side of fame and real I.
Speaker 1
But from the customer side, when
I look at it.
Speaker 1
If I look at last three months,
almost 10% of the scooters.
Speaker 1
From the evil side now.
Speaker 1
Lewis motors.
Speaker 2
Now, uh, it's. It's a
combination of many things
Speaker 2
happening. One is.
Speaker 2
Any new technology?
Speaker 2
I think those people who are
urban, especially educated, they
Speaker 3
look at it's green.
Speaker 3
It's the, it's the new.
Speaker 3
Overall, total cost of ownership
in future will come down. It may
Speaker 3
not be coming down now, but in
future it will come down.
Speaker 4
So my view Vietnamization is
going to be real.
Speaker 3
Whether the numbers people are
talking about is going to be at
Speaker 2
that percentage, what are the
support infrastructure is going
Speaker 2
to put? What are the other?
Speaker 1
Uh, support what government is
going to give.
Speaker 1
How it is going to pan out in
the rural? This may be the
Speaker 3
challenges going forward, but.
Speaker 3
The inflation in the oil import.
Speaker 2
Depreciation of the currency,
all these are going to put a lot
Speaker 2
of pressure on the oil prices in
India. I'm not even bringing
Speaker 2
the.
Speaker 1
Uh.
Speaker 1
Uh, sustainability. I'm not even
bringing the green portion of it
Speaker 1
in India now.
Speaker 1
Coming back to TV, US uh, we
started the journey on EV.
Speaker 2
Almost seven or eight years
back. And that is the
Speaker 3
culmination of IQ.
Speaker 3
So when we are talking today, we
are working as though.
Speaker 3
The entire transition is going
to be easy.
Speaker 3
OK, while I'm talking, please
don't misunderstand me. That IC
Speaker 3
is all stopped, no.
Speaker 4
I see we have a strong team.
Speaker 4
They will, they will take care.
They will focus on domestic market, international market.
Even in IC, we give a maximum number of new products, new
technology, new features both in domestic market and
international market.
Speaker 4
But that doesn't require top
management intervention at all.
Speaker 4
There are enough people who are
very well trained who knows how
Speaker 4
to understand the customer,
customer needs and focus on that.
Speaker 2
Here is something where all of
us need to put our energy, mind including.
Speaker 1
1st is to create the product
which is acceptable to the
Speaker 1
market while I'm talking IQ.
Speaker 1
I think we are. We are now
trying to look at how do we ramp
Speaker 1
up very close to 10,000 this
month and then take it to
Speaker 1
something like 25,000.
Speaker 2
If I have to ramp up first is
demand, the customers would like our product and I'm very happy
that.
Speaker 1
I could has got more than 25,000
booking. I have closed the booking primarily because if you
don't deliver.
Speaker 2
No customer is going to keep
quiet because he gets restless.
Speaker 2
And we are only there in 180
town stroke cities in India. We
Speaker 2
are not even there everywhere.
Speaker 3
So the first step is deliver the
Q variance to the market.
Speaker 3
Because customer loves it. It
is. It is seen as uh, all the benefits of an ice. OK, for
example, it can.
Speaker 3
In Indian Indian usage
condition, when you travel you will know that.
Speaker 4
Practically the entire family
will sit on the scooper, 2 + 2 minimum. They will carry their
baggages, good roads, bad roads, flyovers.
Speaker 4
Sometimes it is rainy, sometimes
it is dusty, sometimes is very hot. Weather it. It varies. Even
in India, now it is the winter. The pollution levels reach, so
whatever you have seen in uh eyes, it gives all that, plus it
gives a lot of connected features it gives.
Speaker 1
The digital connect, it gives
voice assist, it gives every element of.
Speaker 4
Uh, modern? Uh.
Speaker 4
Modern requirements of any
consumer who uses this.
Speaker 4
It's my smartphone, so.
Speaker 1
We always say that it's
smartphone and rules. OK, they
Speaker 1
want this, but they also want to
write.
Speaker 1
OK, then we have.
Speaker 2
Faster charging facilities. We
are also tied up with many infra companies in India.
Speaker 2
So that public charging happens
as of now, most of the consumers are using home charging as of
late.
Speaker 1
But as the numbers go up, I'm
very sure and also application today.
Speaker 2
We have tied up with Amazon.
There are there are many ecommerce companies. I think
they will have fleets where they will have public charging, they
will have their own charging facilities, OK. So we will have
to look at commuters, we have to look at own owned by the
computer. We have to also look at those we are which are using
for in my opinion utility purposes.
Speaker 3
We have also looking at.
Speaker 3
Coming up with the products in
various customer categories, what you have seen is a commuter
scooter. Now you will see many more products.
Speaker 3
You can look at a scooter range,
motorcycle range, I think we have the best range today and
each range is going for certain customer segments.
Speaker 3
Segment by segment, we are looking at what kind of EV
products are required, how it has to be differentiated with
the customer usage.
Speaker 2
And please understand with the V
coming in.
Speaker 1
We have a huge potential to get into, not only to developing
markets, also to the developer developed markets. So far most
of our exports are into developing markets. Only product which is going to
the developed markets is the partnership with which we are
doing BMW 310 Series which is. More than 120,000 customers are
there in all markets, whether it is Europe, US, Japan. China, Australia, every
developed market.
Speaker 1
This gives us an opportunity
through EV. And uh, uh, one positive thing
is, uh pretty confidential, uh, because we are with design and I
can share with you.
Speaker 3
The next.
Speaker 3
Uh.
Speaker 4
New platform of the two Wheeler School 2 Wheeler for BMW is completely designed and
developed by US.
Speaker 4
For the global markets and for
us also for the months.
Speaker 4
Door.
Speaker 3
Ebie is certain EB will happen and the way we are looking at NTS is already the changes
happened.
Speaker 2
OK. While I'm talking, the reality is not reality. It will be there. I will be there. Ice
transition and uh, uh, motorcycles. We have to closely
study how it is going to happen.
Speaker 4
Many of the developing markets
are there, African markets, I don't think it is going to be
easy tomorrow because they have their own challenges. Maybe some
parts of the Asian markets might change.
Speaker 1
OK. But even in Indonesia, what
we are hearing is 202425.
Speaker 1
So my view next to five years are going to be in the transition points and we have
made enough investments.
Speaker 2
We have hired new experts in the areas of software electronics, digitization.
In addition to our strong engineering team on the electric side, because this is what is
going to make the huge difference for future.
Speaker 1
I hope I have answered that.
Speaker 2
Yes. I mean, I'm gonna ask more of a generic question. As you look five years out, you have a
vision for TBS in the electric space.
Speaker 3
What would be the reasons why
you would not succeed? Like what are the main challenges to
achieving success in your vision?
Speaker 3
Uh, I think, I think I, I, I
don't, I I don't, uh think that
Speaker 3
uh, we will we will have any
kind of. Challenges, uh, the risks,
according to me, see we always focus on the customer.
Speaker 4
OK. We never start with the
bottom line in any business.
Speaker 4
Uh, even in IQ we started giving
something which is liked by the customer.
Speaker 1
OK. When the top line is there,
every line will come. That has been our faith and belief and
that has happened also. OK, I can give you 2 big analogies.
When we invested in Indonesia, 99% is Japanese brand. We went
to Indonesia.
Speaker 1
We created new products for the market. We did not take Indian, Indian products because the
consumers are different, their usages are different.
Speaker 2
And we stayed here, we stayed
there, and uh, last three years
Speaker 2
we are profitable.
Speaker 3
Now customers love our product,
love our product, really love our product and the numbers are
going up month after month the numbers are going up and you
will see the Profits and the EBITDA going up
substantially because uh and and uh for your information, when we
started almost 30 members were from India. Today just two are
from India. It is completely driven by the local team. That
is our belief, so.
Speaker 4
Another example is our previous
credit service.
Speaker 2
Well, that is an Indian example.
Speaker 3
Today, it is one of the most profitable it is. It is already the book size is all the more
than 20,000 crores.
Speaker 2
And uh, if I look at the delinquency rate, it's the best
Speaker 2
in the industry, correct? They
say.
Speaker 1
Doing very good.
Speaker 2
You asked about the challenges
that we face five years down the
Speaker 2
line. Today, the challenges are
more on the cost side.
Speaker 3
And as far as we internally concerned, whether fame or
without fame, we don't consider that as a driving factor for the
growth of the industry or profitability of the company. In all our projections famous,
we assume that that will not be there.
Speaker 2
When when whenever the date is fixed is that it was March 2023
Speaker 2
and the only part which is sorry
that I have only one modification.
Speaker 3
And all of us started export,
all of you know that we had benefits almost 14%.
Speaker 3
But every government will start
supporting industries to export.
Speaker 4
Today, the same 14% is only 1
1/2% or 2%.
Speaker 4
OK. So even even from the
government side when we are talking about EV transition?
Speaker 3
Today there is a huge import
bill in oil. OK, that is a huge import bill.
Speaker 4
The EV transition is going to
help the government as well. The import bill is going to come
down steadily. OK and?
Speaker 1
Government also knows that
practically the biggest thing is
Speaker 3
uh.
Speaker 1
Uh selves. And there is no cell
manufacturing in India Today.
Speaker 1
It's all important, OK?
Speaker 1
For us, the BMS is designed and
manufactured by us here.
Speaker 1
Selby by same way whether it is
motor controller, the biggest difference between many
companies and our company is our design.
Speaker 1
Do you work with partners either
in India or outside and we have a very clear plan of design and
development. The benefit is when the volume goes up, you, you can
look at a common platform IBC,
Speaker 2
you can be common, we can look
at how to leverage the cost can come down the same principles
whatever we have used.
Speaker 1
To. To to reduce the to to
reduce the uh.
Speaker 3
Post on one side and also to
colonize on the other side. So
Speaker 3
this becomes a win win for the
supply chain as well As for the country.
Speaker 4
The volume is the key. That's
why I said I'm strategy has been
Speaker 3
00:17:23.623 --> 00:17:25.840
customer, customer, customer
delight.
Speaker 3
00:17:26.790 --> 00:17:30.975
Leading to developing certain
platforms which are common for huge scale.
Speaker 2
00:17:32.690 --> 00:17:33.630
Even in the EV.
Speaker 2
00:17:34.530 --> 00:17:38.690
Then very clearly owning those
design areas where the cost can make a more from the customer
side if we have to differentiate like a Jupiter 110 and Jupiter
125 and then enter.
Speaker 1
00:17:47.070 --> 00:17:48.170
OK, performance.
Speaker 1
00:17:49.030 --> 00:17:53.133
The connectivity, the kind of
digitization each customer wants. For example we starting
with I can only give you analogy 160 Apache 162 V 164 V 182
hundred 225 then 300 with the.
Speaker 2
So each one has got a segment,
each one is focused on certain customer segments. You can see
the same analogy here in the EV as well.
Speaker 1
00:18:12.570 --> 00:18:16.567
OK. That is what is going to
increase the customer delight, increase the volume.
Speaker 1
And this is going to help us to
work with the supply chain to control the cost and reduce the
cost.
Speaker 4
And according to me.
Speaker 1
00:18:30.770 --> 00:18:33.863
But government will find a way
of supporting this industry transition.
Because they did in their own
interest, this is required.
Speaker 2- Import Bill has to come down,
means some other thing has to
Speaker 2 : go
Speaker 1 --> 00:18:50.164
OK, I understand that. Like what
what I'm trying to understand is
Speaker 1 --> 00:18:50.790
or guesses.
Speaker 1
00:18:51.790 --> 00:18:54.955
There are a few assumptions that
go into what do you think the
Speaker 2
00:18:54.955 --> 00:18:55.810
future will hold?
Speaker 3
00:18:56.910 --> 00:19:00.402
But which are the assumptions
that are very critical for this
Speaker 4
00:19:00.402 --> 00:19:03.500
to be true? That's what I'm
trying to understand like.
Speaker 1
00:19:04.570 --> 00:19:08.270
Is like, is what is the risk to
this vision being true like?
Speaker 2
00:19:09.630 --> 00:19:14.288
See, there are there are two,
three. The biggest, biggest risk
Speaker 3
00:19:14.288 --> 00:19:15.620
I'm seeing is the.
Speaker 4
00:19:17.190 --> 00:19:18.660
Semiconductor availability.
Speaker 1
00:19:19.910 --> 00:19:23.440
OK. What's the biggest risk is
getting constant demand.
Speaker 2
00:19:23.440 --> 00:19:27.223
Fortunately demand is there. If
you give a good product, EV
Speaker 3
00:19:27.223 --> 00:19:31.258
customers are saying I can come
and buy, we are only present in
Speaker 4
00:19:31.258 --> 00:19:35.230
180. When I go All India, the
demand can be much, much higher.
Speaker 1
00:19:35.970 --> 00:19:39.085
And we have the capability of
with the products now from the
Speaker 2
00:19:39.085 --> 00:19:39.750
ramp up side.
Speaker 3
00:19:40.940 --> 00:19:42.950
I need to get the parts on time.
Speaker 4
00:19:43.750 --> 00:19:48.230
Or ahead of time? How do we work
with this suppliers? How do we
Speaker 4 --> 00:19:49.980
give them the confidence?
Speaker 4
00:19:50.700 --> 00:19:54.713
That because some of them are
very big suppliers on the last
Speaker 4
00:19:54.713 --> 00:19:58.924
one year meeting them, meeting
their CEO's and they're visiting
3a377328-b39e-4b32-95c0-86873158d9c4-2
00:19:58.924 --> 00:20:03.201
here, they've seen that TV is a
very, very serious player in the
Speaker 4
00:20:03.201 --> 00:20:04.320
two Wheeler side.
Speaker 1
00:20:06.180 --> 00:20:10.140
So they have started now looking
at how do we have a have a very
Speaker 1
00:20:10.140 --> 00:20:13.857
clear agreement with you on
three years, five years, how can
Speaker 1
00:20:13.857 --> 00:20:14.710
we supply you?
Speaker 2
00:20:15.360 --> 00:20:19.188
So I think it is again demand
customer delight and they're getting the confidence and
putting, uh, the capacities to to get the semiconductors. So if
you ask me that is 1.
Speaker 2
00:20:28.110 --> 00:20:31.190
How do we get it and what kind
of challenges?
Speaker 2
00:20:32.760 --> 00:20:37.690
Second, second, I don't think it
is a risk.
Speaker 3
00:20:38.800 --> 00:20:41.555
Our own opportunity to get into
this developed markets and
Speaker 3
00:20:41.555 --> 00:20:43.050
developing markets in a big way.
Speaker 4
00:20:44.020 --> 00:20:47.284
OK. There may be some
localization requirements, OK,
Speaker 4
00:20:47.284 --> 00:20:50.980
because any market and EV when
you go there, they might say
Speaker 4
00:20:50.980 --> 00:20:54.552
this content has to be local
because every market has got certain benefits.
Speaker 2
00:20:56.470 --> 00:21:01.348
So how do we establish that? How
do we, how do we make sure that
Speaker 2
00:21:01.348 --> 00:21:03.750
that we get on time this may be?
Speaker 1
00:21:04.400 --> 00:21:08.772
I won't say that these are these
are timeline. You know normally
Speaker 1
00:21:08.772 --> 00:21:12.674
any timeline there could be a
delay of up to three months
Speaker 1
00:21:12.674 --> 00:21:13.280
possibly.
Speaker 2
00:21:13.970 --> 00:21:16.360
OK. I'm saying from the Indian
experience also.
Speaker 2
00:21:18.280 --> 00:21:21.530
Uh #3 uh.
Speaker 3
00:21:23.100 --> 00:21:26.467
The current political,
geopolitical situation, which is
Speaker 3
00:21:26.467 --> 00:21:27.910
applicable to everybody.
Speaker 4
00:21:29.040 --> 00:21:33.160
OK. And geopolitical situation,
why do I say that? Because the
Speaker 4
00:21:33.160 --> 00:21:36.692
raw material for the EV are
specifically available in
Speaker 4
00:21:36.692 --> 00:21:37.870
certain countries.
Speaker 1
00:21:38.600 --> 00:21:41.030
So they can use it to their
advantage.
Speaker 1
00:21:42.180 --> 00:21:45.080
OK. And that can create some
challenges?
Speaker 2
00:21:45.850 --> 00:21:47.060
But fortunately.
Speaker 2
00:21:48.340 --> 00:21:52.615
We are also deerskins that we
are not a single country
Speaker 2
00:21:52.615 --> 00:21:57.512
dependent. For example, we we
used to import from China almost
Speaker 2
00:21:57.512 --> 00:21:58.290
20 to 23%.
Speaker 3
00:21:59.590 --> 00:22:01.920
Now our report from China is
less than 4%.
Speaker 3
00:22:02.640 --> 00:22:05.659
But it has happened over A8
quarter. You can't do it like
Speaker 3
00:22:05.659 --> 00:22:05.920
this.
Speaker 4
00:22:07.240 --> 00:22:07.600
You know.
Speaker 3
00:22:08.610 --> 00:22:12.755
You can't do that. You need to
have a either a local. Which
Speaker 1
00:22:12.755 --> 00:22:16.969
country is your biggest? Uh uh
where do you import from? The
Speaker 1
00:22:16.969 --> 00:22:21.183
which is the country which is
the largest import now the now
Speaker 1
00:22:21.183 --> 00:22:24.499
the import. The biggest in EV is
only the cell.
Speaker 2
00:22:25.970 --> 00:22:29.975
Only the same all the remaining
I have either they have got
Speaker 2
00:22:29.975 --> 00:22:30.910
facility here.
Speaker 3
00:22:32.160 --> 00:22:36.258
OK, even in cell there are many
people as a part of the PLA,
Speaker 3
00:22:36.258 --> 00:22:40.222
they are, they are going to be
here in India. They are all
Speaker 3
00:22:40.222 --> 00:22:42.910
committing supplies sometime
2024-2025.
Speaker 1
00:22:44.030 --> 00:22:47.548
OK, if 2024 and 2025 happens,
that will be brilliant.
Speaker 1
00:22:47.548 --> 00:22:48.200
Brilliant.
Speaker 4
00:22:51.120 --> 00:22:53.580
And but the batteries are still
lithium-ion or?
Speaker 4
00:22:54.770 --> 00:22:56.200
What is this video?
Speaker 2
00:22:58.640 --> 00:23:00.300
Yeah, we only deal with the
lithium.
Speaker 1
00:23:03.300 --> 00:23:05.510
But that source continues to be
China, correct?
Speaker 1
00:23:06.250 --> 00:23:09.632
No, no, there are. There are
other than China. There are
Speaker 1
00:23:09.632 --> 00:23:10.700
plenty of sources.
Speaker 2
00:23:11.940 --> 00:23:15.847
For example, there are there are
sources from North Korea, there
Speaker 2
00:23:15.847 --> 00:23:17.230
are sources from Latta.
Speaker 1
00:23:18.710 --> 00:23:23.103
China is also uh there, but uh,
uh as of now. And the Indian
Speaker 1
00:23:23.103 --> 00:23:27.640
forces are supposed to be 2024
and 2025. They may buy some raw
Speaker 1
00:23:27.640 --> 00:23:31.529
materials from different
different countries. I don't
Speaker 1
00:23:31.529 --> 00:23:34.050
think they will source from
China.
Speaker 4
00:23:35.720 --> 00:23:38.730
Yeah. So who they may source in
China because?
Speaker 4
00:23:41.350 --> 00:23:45.468
India was starting from exile,
which is a battery manufacturer.
Speaker 2
00:23:45.468 --> 00:23:48.750
They have a big, big facility.
They are investing.
Speaker 2
00:23:49.450 --> 00:23:51.650
Tata Green is also planning to
do.
Speaker 2
00:23:52.300 --> 00:23:53.870
Reliance Group is planning to
do.
Speaker 1
00:23:54.570 --> 00:23:57.966
I'm talking about the big
people, Big Brothers. There are
Speaker 1
00:23:57.966 --> 00:24:01.656
a lot of small ones, including
other group company, Lucas, UH.
Speaker 1
00:24:01.656 --> 00:24:04.350
They are also trying for some
technology, so.
Speaker 2
00:24:05.300 --> 00:24:09.708
My view, three to five years
there will be, uh, you know, NMC
Speaker 2
00:24:09.708 --> 00:24:12.410
LFP's different type of
technologies.
Speaker 3
00:24:14.270 --> 00:24:19.267
All of these are possible, so if
you are successful next couple
Speaker 3
00:24:19.267 --> 00:24:24.031
of years, you will have more
options in 2025 onwards even in
95f8d86c-376f-4a51-a02e-b6888d9f7eb4-2
00:24:24.031 --> 00:24:24.500
India.
Speaker 4
00:24:26.190 --> 00:24:29.470
When we started motor, for
example, we had only one
Speaker 4
00:24:29.470 --> 00:24:30.480
supplier, Bosch.
Speaker 1
00:24:31.190 --> 00:24:34.342
OK. Yeah. Today already there
are three suppliers in India
Speaker 1
00:24:34.342 --> 00:24:34.770
already.
Speaker 2
00:24:37.750 --> 00:24:41.762
So the rate of speed of change
and the agility, what you see in
Speaker 2
00:24:41.762 --> 00:24:44.020
this space is excellent,
excellent.
Speaker 1
00:24:48.960 --> 00:24:52.960
And just sort of now moving back
a bit to the overall company.
Speaker 1
00:24:53.830 --> 00:24:58.428
Um, I think you guys are doing a
fantastic job in, you know, the
Speaker 1
00:24:58.428 --> 00:25:01.470
EV space and also the the higher
CC bikes.
Speaker 2
00:25:03.720 --> 00:25:06.428
You know, as everyone from the
outside, we always look at it
Speaker 2
00:25:06.428 --> 00:25:06.650
like.
Speaker 2
00:25:07.260 --> 00:25:07.880
The.
Speaker 3
00:25:09.160 --> 00:25:12.813
For TV's, margin expansion is
always the key. You know, game
Speaker 3
00:25:12.813 --> 00:25:16.586
you started to do well over the
last, you know, two years, how
Speaker 3
00:25:16.586 --> 00:25:20.359
sustainable and how, how much
more room is there to run there.
Speaker 3
00:25:22.290 --> 00:25:25.573
Uh, you can, you can move a
little bit to to to right side
Speaker 3
00:25:25.573 --> 00:25:27.020
because you can see, yeah.
Speaker 1
00:25:29.370 --> 00:25:33.171
Yeah. Well, our our, uh, first
of all, let me let me make it
Speaker 1
00:25:33.171 --> 00:25:35.540
clear. We are not ours to
margin, OK?
Speaker 1
00:25:38.080 --> 00:25:41.110
OK, because, uh, because I have.
I have met many people.
Speaker 1
00:25:42.030 --> 00:25:45.361
We I think you used the right
word, sustainable. I think what is most important is.
Speaker 4
00:25:47.550 --> 00:25:51.465
Uh, we always look at the win, win, win, win for all the partners. You know, customer
first is customer, you have to
Speaker 4
00:25:55.587 --> 00:25:59.984
have brands which are delighting
the customer and any any brand which does 25,000, I'm saying
from empirical control, you know
Speaker 4
00:26:04.312 --> 00:26:05.480
25,000 per month.
Speaker 1
00:26:06.460 --> 00:26:10.301
That will be successful for a for a company from the point of view of supporting the brand and growing the brand from the
Speaker 1
00:26:14.019 --> 00:26:17.984
supplier side, the investments
whatever they have made and also
Speaker 1
00:26:17.984 --> 00:26:21.826
from the dealer side because
25,000 which is divided into all the dealers.
Speaker 3
00:26:23.500 --> 00:26:26.610
OK, so today.
Speaker 2
00:26:27.530 --> 00:26:31.109
40 years back and now we have
Apache, we have of course I'm,
Speaker 2
00:26:31.109 --> 00:26:34.689
I'm, I'm more proud has been
there throughout. OK, Robert is a unique unique brand.
Speaker 1
00:26:36.780 --> 00:26:40.762
I always say that it is going to
the uh every day. Somebody wants
Speaker 1
00:26:40.762 --> 00:26:44.443
to get $2.00 three dollars and
build his family. It's like a
Speaker 1
00:26:44.443 --> 00:26:47.882
community development. It's a
massive, massive community development of the Indian market
and many markets we have seen
Speaker 1
00:26:51.684 --> 00:26:55.304
because he starts earning the
$2.00, three dollars. Then he
Speaker 1
00:26:55.304 --> 00:26:58.985
buys one more Muppet. Then he
puts education first. He takes
Speaker 1
00:26:58.985 --> 00:27:02.424
care of his basic needs and
education of the children. I
Speaker 1
00:27:02.424 --> 00:27:05.743
have more pet customers who have
put their children to engineering and it.
Speaker 2
00:27:07.060 --> 00:27:10.977
And doctors and they are very
proud saying that thanks to this
Speaker 1
00:27:10.977 --> 00:27:15.082
Muppet I'm able to build this is
like a self-employment everyone.
Speaker 1
India in India starts with a
moment first I think. OK, so
Speaker 1
that brand even now we are
selling almost 40,000 forty
Speaker 1
00:27:22.109 --> 00:27:22.420
5000.
Speaker 2
00:27:23.090 --> 00:27:23.510
OK.
Speaker 2
00:27:25.050 --> 00:27:30.050
Uh, the new brands, if I look at
it, Apache and talk.
Speaker 3
00:27:30.700 --> 00:27:31.500
Jupiter.
Speaker 4
Radio reader which was launched
during the the Pandemic Raider
Speaker 4
Twitter 125 OK then HL series in
the in the international market,
Speaker 4
we don't sell any X in India, it
is only for the African market.
Speaker 1
OK, we do more than 50,000
numbers, 60,000 numbers only in that brand TV S
King is 3 Wheeler. OK now I'm very sure IQ
Speaker 1
will be part of the 25,000 club
by March. I'm very, very concerned. So.
Most important is creating a
sustainable pipeline and growing ahead of the industry.
Speaker 2
That is there. Now once you get
that then every element get amortized for higher and higher
volume.
Speaker 2
We don't require extra people in
the ice space, OK? We are now transferring and building a very
strong team in the EV space.
Speaker 3
OK, many of the ice people
definitely there are there are specific things like software,
digital, you need electronics engineers, you need motors
controllers.
Speaker 4
OK, but there is a chassis,
there is a seed, there is a external uh design, there are
clusters. These are all common with ice. So, so we are, we are
now in the in the organization transformation of how do we
liberate some of the core competent people more and more
to the EV space, to the new technology space.
Speaker 4
Marketing cost you have seen. Year after year, it is coming.
Speaker 1
With going up volume, we are
able to also colonize, we are able to also get better. Earlier
we used to have only one
Speaker 1
00:29:12.430 --> 00:29:16.021
supplier. Now we have inducted
the second supplier because the
Speaker 2
00:29:16.021 --> 00:29:19.670
moment you have you know second
supplier you can always get the scale benefits and you are able
to get also from the increment.
Speaker 3
00:29:23.318 --> 00:29:26.568
So these are all proven theories
and whatever the margin expansion you are seeing, you
will continue to see, you will continue to see. OK, please
understand even last quarter with higher volume of EV, we are
at 10.2.
Speaker 4
And Evie, we don't make, we make
a positive contribution but not in line with the ice because
there's investment. You know we are, we are, we are going step
by step. So with TV possibly we may be only company which is
expanding our margins and it will continue, this journey will
continue because I'm pretty confident that we will grow
ahead of the industry. My only simple if you were here you
could have visited the plant.
Speaker 4
00:30:01.370 --> 00:30:04.607
The only simple principle is we
have to grow ahead of the industry every month.
Speaker 4
00:30:06.970 --> 00:30:08.350
And and.
Speaker 4
00:30:08.980 --> 00:30:11.623
We don't give credit. It is all
cash and carry even in the domestic market.
Speaker 1
00:30:13.130 --> 00:30:15.120
My competitors are still on
credit.
Speaker 1
00:30:16.140 --> 00:30:16.590
OK.
Speaker 2
00:30:17.730 --> 00:30:20.753
Of course, they always
complaints to me when we give credit, we also get some
interest which goes into our EBITDA. OK, now it is not there.
Speaker 3
00:30:26.970 --> 00:30:28.450
And our principle is?
Speaker 1
00:30:29.100 --> 00:30:30.630
25 to 30 days of stock.
Speaker 1
00:30:31.630 --> 00:30:32.490
Not more than that.
Speaker 1
00:30:33.470 --> 00:30:36.650
So the dealers, if they have to
invest, they have to will.
Speaker 1
00:30:37.640 --> 00:30:41.848
My sales guy said don't get into
credit the remove the credit
Speaker 1
00:30:41.848 --> 00:30:44.020
because I I lose my flexibility.
Speaker 2
00:30:45.070 --> 00:30:48.231
And our flexibility nothing you
give whatever wanted and not
Speaker 2
00:30:48.231 --> 00:30:50.720
wanted to the dealer, now that
is not possible.
Speaker 2
00:30:52.020 --> 00:30:55.636
Dealer decides based on the full
Leisa decides what is demanded
Speaker 2
00:30:55.636 --> 00:30:56.540
by the customer.
Speaker 2
00:30:58.710 --> 00:31:02.122
So we work in a very clear pull
system across the channel. You
Speaker 2
00:31:02.122 --> 00:31:05.317
can talk to some of our dealers,
you can visit some of our
Speaker 2
00:31:05.317 --> 00:31:06.780
competitor dealers as well.
Speaker 2
00:31:08.440 --> 00:31:12.006
Again, from the point of view of
the customer, because when we
Speaker 2
00:31:12.006 --> 00:31:15.573
get into a restaurant, we want a
crispy dosa, right? We want a
Speaker 2
00:31:15.573 --> 00:31:18.970
crispy Vada. We don't want three
days back, four days back.
Speaker 2
00:31:21.100 --> 00:31:25.305
Even when I say 25 days talk,
there are dealers, there are
Speaker 2
00:31:25.305 --> 00:31:27.230
grants which maybe 40 days.
Speaker 2
00:31:28.800 --> 00:31:30.040
So from the consumer.
Speaker 2
00:31:31.220 --> 00:31:33.600
You know when they buy a water
bottle, they look at the
Speaker 2
00:31:33.600 --> 00:31:35.130
manufacturing date and expiry
date.
Speaker 2
00:31:36.570 --> 00:31:40.441
That is the sensitivity keep
bringing down, you know, fresh
Speaker 2
00:31:40.441 --> 00:31:43.410
vehicles should be available to
the customer.
Speaker 2
00:31:45.620 --> 00:31:46.810
So we work with.
Speaker 2
00:31:48.150 --> 00:31:50.524
It's a complete, complete, full
system, both in domestic and
Speaker 2
00:31:50.524 --> 00:31:51.070
international.
Speaker 2
00:31:52.370 --> 00:31:56.132
OK. And the real real fact is
you have to sell to the
Speaker 2
00:31:56.132 --> 00:31:56.760
customer?
Speaker 2
00:31:57.920 --> 00:32:01.680
Not by dispatch. Add to the
stocks, no, not possible.
Speaker 2
00:32:04.640 --> 00:32:05.120
So.
Speaker 3
00:32:06.390 --> 00:32:09.070
You guided that things are going
to improve, but.
Speaker 3
00:32:10.400 --> 00:32:14.011
What's your aspiration, you
don't give guideline on the on
Speaker 3
00:32:14.011 --> 00:32:17.133
the margins, but we only
demonstrated the last few
Speaker 3
00:32:17.133 --> 00:32:20.010
quarters how we have grown and
we continue to.
Speaker 3
00:32:25.360 --> 00:32:27.490
And can you go?
Speaker 3
00:32:28.680 --> 00:32:33.179
Continue to take this company's
growth to developed markets. Now
Speaker 3
00:32:33.179 --> 00:32:36.917
you know there is a huge
opportunity, there is a huge
Speaker 3
00:32:36.917 --> 00:32:38.510
opportunity in pricing.
Speaker 1
00:32:39.630 --> 00:32:42.965
OK. If I'm able to ramp up IQ,
I'll put it first in Europe, I
Speaker 1
00:32:42.965 --> 00:32:43.880
promise you that.
Speaker 4
00:32:45.280 --> 00:32:48.886
OK, alright. Next question was
like can you comment on your
Speaker 4
00:32:48.886 --> 00:32:50.690
export strategy going forward?
Speaker 1
00:32:51.920 --> 00:32:55.317
I think with the, with the
premium isation, with the uh,
Speaker 1
00:32:55.317 --> 00:32:59.013
the the 3:10 product and the
further products what we are now
Speaker 1
00:32:59.013 --> 00:32:59.550
focusing.
Speaker 1
00:33:00.660 --> 00:33:04.206
And uh, the CMG and ego
movement, whatever we have
Speaker 1
00:33:04.206 --> 00:33:08.239
acquired in European market
primarily to understand these
Speaker 1
00:33:08.239 --> 00:33:12.203
consumers, why they are using,
how they are using who is
Speaker 1
00:33:12.203 --> 00:33:12.690
buying.
Speaker 1
00:33:13.840 --> 00:33:16.630
Who is using the two Wheeler?
Who is using the ebike?
Speaker 1
00:33:18.130 --> 00:33:18.810
Norton.
Speaker 1
00:33:19.710 --> 00:33:23.630
I think these are all going to
help us to really, really look
Speaker 1
00:33:23.630 --> 00:33:23.820
at.
Speaker 1
00:33:24.570 --> 00:33:27.890
Developed market. So far we have
seen developed markets through
Speaker 1
00:33:27.890 --> 00:33:28.720
the eyes of BMW.
Speaker 1
00:33:29.580 --> 00:33:32.480
The Hender 125,000 customers.
Speaker 1
00:33:33.210 --> 00:33:38.802
And what it has given us
confidence that we can also this
Speaker 1
00:33:38.802 --> 00:33:44.202
125,000 almost 98% is local
supplier, OK, just for your
Speaker 1
00:33:44.202 --> 00:33:45.360
information.
Speaker 1
00:33:47.020 --> 00:33:50.635
Only two percent is some parts
which are coming common to BMW.
Speaker 1
00:33:50.635 --> 00:33:53.849
Otherwise 98% of the parts for
what is used in this are
Speaker 1
00:33:53.849 --> 00:33:56.260
completely completely sourced
from India.
Speaker 1
00:33:56.950 --> 00:33:58.020
From Indian suppliers.
Speaker 1
00:33:59.440 --> 00:34:03.087
OK. And that is what is going to
global markets and the quality
Speaker 1
00:34:03.087 --> 00:34:06.621
of these products are equal to
Berlin or one step better than
Speaker 1
00:34:06.621 --> 00:34:07.020
Berlin?
Speaker 1
00:34:08.030 --> 00:34:09.820
These are statements from BMW.
Speaker 1
00:34:11.000 --> 00:34:14.308
So what does it give us? The
confidence that, yeah, you have
Speaker 1
00:34:14.308 --> 00:34:17.780
the capability of capability and
capability, design capability.
Speaker 1
00:34:18.740 --> 00:34:22.250
To to go to the developed
markets #1 #2.
Speaker 1
00:34:24.130 --> 00:34:28.128
We are not a company which says
take this product. OK, we know
Speaker 1
00:34:28.128 --> 00:34:32.063
India, South Indian wants. I
don't know whether they can give
Speaker 1
00:34:32.063 --> 00:34:36.061
you a good South Indian coffee,
but somebody wants a good tea.
Speaker 1
00:34:36.061 --> 00:34:39.869
OK, somebody wants only roti
Dal. Somebody wants only dosa.
Speaker 1
00:34:39.869 --> 00:34:43.741
Somebody wants they start with
the sweet. So you can't force
Speaker 1
00:34:43.741 --> 00:34:47.612
the customer. No, this is the
menu I have taken. It will not
Speaker 1
00:34:47.612 --> 00:34:47.930
work.
Speaker 1
00:34:49.040 --> 00:34:52.467
Because of our core design and
development capability, we can
Speaker 1
00:34:52.467 --> 00:34:52.910
look at.
Speaker 1
00:34:54.000 --> 00:34:56.837
The the products what we make,
design and develop in Indonesia,
Speaker 1
00:34:56.837 --> 00:34:57.990
we don't sell it in India.
Speaker 1
00:34:59.220 --> 00:35:02.916
OK. It's only for certain
markets which are unique to that
Speaker 1
00:35:02.916 --> 00:35:04.420
type of school backback.
Speaker 1
00:35:05.220 --> 00:35:07.340
New York Rocks or dance?
Speaker 1
00:35:08.750 --> 00:35:09.480
Teammate.
Speaker 1
00:35:10.120 --> 00:35:12.140
The Africa HLX series.
Speaker 1
00:35:12.990 --> 00:35:18.437
OK, it can carry four people.
It's a taxi, taxi, bike, OK and
Speaker 1
00:35:18.437 --> 00:35:20.370
it can carry 300 KG's.
Speaker 1
00:35:21.720 --> 00:35:25.371
OK. And uh, normal Chinese bikes
durability is less than one
Speaker 1
00:35:25.371 --> 00:35:29.201
year. Our durability is 3 years.
So they look at the total cost
Speaker 1
00:35:29.201 --> 00:35:29.979
of ownership.
Speaker 1
00:35:30.730 --> 00:35:32.080
And today they love it.
Speaker 1
No, the analogy where I'm
highlighting is whether it is developed market. This one we
have the design development and JD Power, we are number one for
the last seven years. So I think the strength of the
company is understanding customer, customer insight,
quality, durability.
Speaker 1
00:35:51.550 --> 00:35:54.643
And investing in those features
which are delighted you, you come and see our 310 series, you
will see write mode, you will see voice connect, you will say
Digi Connect, which are all seen in the 1200 CC bikes.
Speaker 1
00:36:04.100 --> 00:36:07.784
You know when mobile customer
comes, I always tell this as an analogy, but I have the dealers
here. My mobile customer first comes and looks at my R310 in
the dealership is not going to buy.
Speaker 2
00:36:17.040 --> 00:36:20.400
If you ask him, he says no, no,
no, I want to buy for my son.
Speaker 2
00:36:23.930 --> 00:36:27.372
I'm not going to buy this
fantastic you know that is application of India in a rural
market. Even somebody looks at an R return which is 2 1/2 lakhs
3,00,000, he may have the ability to buy only 50,055
thousand.
Speaker 2
00:36:40.220 --> 00:36:41.600
So that is previous today.
Speaker 3
00:36:43.140 --> 00:36:45.050
So if you ask me.
Speaker 3
00:36:46.290 --> 00:36:50.029
With a much more than EBITDA, I
want to sustainably grow the
Speaker 4
00:36:50.029 --> 00:36:53.401
market, capture the market
disproportionately grow the market, establish the previous
brand, I promise you.
Speaker 2
00:36:57.440 --> 00:36:58.810
You delight the customer.
Speaker 2
00:36:59.900 --> 00:37:03.007
I always tell my finance team,
anytime you want to take pride nowadays we take prices up than
the competition. Most of our brands are higher price than
competition. We don't part, we don't take part even in Diwali
or new we have any discounts.
Speaker 3
00:37:14.360 --> 00:37:17.823
There may be some some sweet box
free because that dealer gives.
Speaker 3
00:37:17.823 --> 00:37:21.126
You know you can't. India is
India you know somebody will ask
Speaker 3
00:37:21.126 --> 00:37:24.323
can you give me a floor mat
free? Something has to be given free.
Speaker 4
00:37:25.410 --> 00:37:29.118
OK, that is Indian mindset. But
we don't give huge, huge discounts like competitor.
Speaker 1
00:37:32.700 --> 00:37:35.832
Again, why we don't give
primarily because if I give discount today, yesterday's
customer will come, hey, you're cheating me yesterday you gave
it to me at this price and most of 50% of the customers we have
seen, especially those retail finance customers.
Speaker 2
00:37:48.990 --> 00:37:53.110
After three years, four years,
the resale price of the bike is their first installment.
Speaker 2
00:38:00.200 --> 00:38:03.484
So five years out, what
percentage of your revenue will
Speaker 1
00:38:03.484 --> 00:38:04.130
be exports?
Speaker 2
00:38:05.600 --> 00:38:06.570
Currently we are 30.
Speaker 3
00:38:07.630 --> 00:38:11.285
Currently we are growing year
after year. We are at 30. I'm pretty confident it will grow at
the same pace.
Speaker 4
00:38:17.530 --> 00:38:21.800
OK. Last three years back we
were at 20%, now we are at 30%.
Speaker 2
00:38:26.490 --> 00:38:27.780
Better margin profile.
Speaker 2
00:38:28.770 --> 00:38:29.780
What's this domestic?
Speaker 3
00:38:30.880 --> 00:38:35.476
Exports see country by country
the margin varies but uh we normally doesn't give any
guidance on the the margins but.
Speaker 4
00:38:42.270 --> 00:38:47.047
If our aspiration, currently we
have the top one amongst the top five, right, but we have a huge
ambition to become.
Speaker 4
00:38:51.810 --> 00:38:56.183
When I'm in the top three, top
four, it is possible for the
Speaker 4
00:38:56.183 --> 00:38:59.390
product range. PvP has got that
capability.
Speaker 2
00:39:03.550 --> 00:39:04.740
And the TV coming in.
Speaker 2
00:39:05.510 --> 00:39:08.753
Practically, it is zero. You
know what our eyes we are talking about EB? It's a huge
opportunity.
Speaker 4
00:39:12.220 --> 00:39:13.370
Your companies like.
Speaker 2
00:39:18.550 --> 00:39:19.040
And.
Speaker 4
00:39:20.880 --> 00:39:25.539
Do you see competition more from
established players or new up
Speaker 4
00:39:25.539 --> 00:39:29.828
comers in the EV space going
forward? I think it is in my opinion.
Speaker 4
00:39:32.180 --> 00:39:35.931
Evie uh, it's interesting.
Suzio. Currently we have more than 300 players.
Speaker 3
00:39:38.270 --> 00:39:43.431
OK. Even 2 to 3% of the 300
become successful and these are all new?
Speaker 2
00:39:45.320 --> 00:39:49.470
OK, I think it is. It is good.
It is good to have new players.
Speaker 2
00:39:50.920 --> 00:39:53.570
OK. Uh, because it gives better
to the customer.
Speaker 3
00:39:54.220 --> 00:39:57.315
It comes with a lot of
innovation, it comes with a lot
Speaker 4
00:39:57.315 --> 00:39:58.160
of agility, so. We can't anymore talk about
established players like Bajaj or Hero or Honda and Yamaha
Suzuki and say that we know the strategy. This is likely to
thinking, OK, I think we have to
look at all out of this world
and authors of this world and
OK, now as of this world and
say, yeah, whoever gives better
to the customer, they will.
And internally, you know, when
companies go through transitions
from let's say from ice to EV?
Speaker 3
How do you sort of maintain the
morale of people who are working
on ice because it's still the
cash cow which is supporting
your growth. So is there an
incentive, sort of?
Speaker 3
How do you incentivize them to
be motivated and sort of keep
going on?
Speaker 1
Brilliant, brilliant, brilliant,
brilliant question.
Speaker 1
What we use as a model.
Um.
Sorry to say I'm a I'm a
mechanical engineer, OK?
Speaker 2
Uh, my R&D head is a
mechanic IC engine head.
But we leave the event I've
seen.
you have to look at
from the customer side and you
have to be.
Learning new new things at every
time.
Speaker 1
OK.
Speaker 3
So we have a big ice team, we
have a new team on the EV.
The new team is not really new
team.
Speaker 2
There are some core people who
are working cross functionally.
Speaker 2
You know, there are areas where.
Speaker 3
We don't have competence or we
have limited confidence like
software or digitization. We
have hired some people. We have
put them into this team.
So it's a shared uh. We have a
unique management system, the
top management, the entire BLP
we have Shared Destiny kind of a thing,
you know, customer satisfaction, share of business profit,
they're all common for all the senior players in their variable
based structure.It's not that a new product guy
comes and produces some new products.
Speaker 1
Actually that was the period 10
years back then we found that
are we gaining market share
because of the new product.
It's every bit up becoming
better.
Speaker 2
OK. Product has to be
successful.
Speaker 1
This shared alignment of the
organizational goals makes a
huge difference in the
transition. Whatever you say.
And even in every space one of
the one of the guiding
principles what we are using for
even for the ice people and the
evil people.
Speaker 3
How we are going to take while
on one side?
Speaker 1
I always use the word rewiring
when the mains are on.
Speaker 2
OK, you are rewiring the
organization to transform into
an EV company.
Embracing the future, how do you
make sure that the transition?
Speaker 1
Without big shots, because the
New River, there will be shots.
Speaker 2
OK, but it cannot be fatal.
And it is, it is, it has got its
own one says it is uh, it is yo
know you have to work with, it's
not only internal also with the
supplier, also with the dealer,
although with the distributor.
Speaker 1
How do we do it in such a way
that?
Speaker 2
There is a mindset change in
line with the consumer change.
Speaker 3
OK. Based on how the consumers
are changing, we have to change
the front.
In line with the company change,
the suppliers have to align and
change.
And I agree with you if uh,
tomorrow there is no no engine.
Speaker 2
OK.
Speaker 3
Then how do we transform as a
company?
Speaker 1
And here also some of the
critical things we design and
develop inside.
And possibly when you come next
time, if you're having time, you
visit us. You will see a man
mortar manufacturing inside the
country.
Speaker 2
I don't manufacture all motors.
But the most critical motors, if
I don't manufacture, I will not
be able to design with the work
with the with the supplier.
And supplier will not get the
confidence. So we are not a
company who just buys some
parts, import some part assemblies and give it to the
consumer, no, no.
Six, it's a balance between
internal.
Make, make and buy design core
is design.
Because if you don't design, you
will not be able to
differentiate to the customer.
Speaker 1
So when do we expect to make a
much positive contribution to
our bottom line? When do we
expect to positively contribute
to our bottom line? I know we
are in an investment phase right
now and I think we are doing
right there, but when do we
expect it to already last year,
last year we were negative on
contribution. This year we are
positive on contribution.
Speaker 2
Volume is the key.
Whatever, I said, the moment I
see volume I I get an
opportunity to. For example, we
had one IQ. Now we have 3 IQ.
3 IQ has got different features.
I'm able to price it
differently. 3 ice cubes have
got different margins. It is not
common margin.
Speaker 4
OK.
Speaker 1
I can give you an analogy. When we started Jupiter. We had one product equal to active.
And always my sales team says Activa brand consideration, brand essence is far superior
Sir. Don't price it equal to active. So we landed up giving better features.
Slightly lesser price or equal price with the active.
Speaker 2
OK, I can't stop it because if somebody has to consider. Activia is almost 60% of the month.
And scooters, what's some customer has to consider Jupiter, we have to tell, the dealer has to say that this these things are superior to Activa.
Speaker 1
That I'm giving you at the same price or?
These are equal to Activa. I give you a little lesser price. Sensible, right?
Speaker 2
We said this way you cannot make money. So we said there will be an activity equivalent called Jupiter. Then we brought a model called Jupiters that X. Which is far superior in terms of, uh, look and feel, in terms of technologies, in terms of features. Then we brought a classic, then we brought a Grande. And today I can tell you 50% of my sales from Jupiter is on this variance.
Speaker 3
Which are priced much higher than active.
Speaker 1
OK, because when one consumer walks in, he says he is also a very good negotiator.
That activate so much price. I got this quotation from Honda.
Speaker 2
00:46:59.520 --> 00:47:02.633
This is the price, this is your product. So why should I give
Speaker 3
you so much price? I said OK
fine you take that active equivalent product, but here you look at it, these are the additional features. This is not there in active.
Speaker 2
00:47:13.540 --> 00:47:16.831
If you have a retail finance customer, you pay another ₹100 more. Suddenly his mind starts thinking ohh ₹100 more. Then
Speaker 2
00:47:20.122 --> 00:47:21.109
I'll land up here.
Speaker 2
00:47:21.940 --> 00:47:22.410
Today.
Speaker 3
00:47:23.440 --> 00:47:26.695
This is a confidential information which naturally I don't share. More than 50% of the active sales is coming from the higher range. I make better ones in there.
Speaker 3
00:47:34.780 --> 00:47:38.851
OK, same IQ. I have version one
originally last year, now I have
Speaker 3
00:47:38.851 --> 00:47:39.540
3 versions.
Speaker 2
00:47:40.260 --> 00:47:46.545
I started with eighteen 18618
eighteen 6558186 hundred that uh
Speaker 3
00:47:46.545 --> 00:47:48.840
sell. Now I have 21700.
Speaker 2
00:47:50.240 --> 00:47:50.660
OK.
Speaker 3
00:47:51.390 --> 00:47:54.993
Between the cell chemistry, my
sourcing is effective, the
Speaker 1
00:47:54.993 --> 00:47:58.533
volumes are higher, I have
variance. I'm only giving you
Speaker 2
00:47:58.533 --> 00:47:59.590
broad strategies.
Speaker 3
00:48:02.510 --> 00:48:02.700
OK.
Speaker 2
00:48:03.450 --> 00:48:07.270
No. For three variants to exist,
my volume has to go to 25,000 Or even beyond.
Speaker 2
00:48:13.170 --> 00:48:17.280
So I'm very clear, the same strategy whatever we are using.
Speaker 4
00:48:18.570 --> 00:48:21.929
On variating and delighting the customer with better and better
Speaker 3
00:48:21.929 --> 00:48:25.130
features, we'll continue even in a V and that is where our, our margins are going to be healthy.
Speaker 2
00:48:30.730 --> 00:48:34.646
Our ambition is also, like you said, how quickly we can make the margin equal twice, OK.
Speaker 2
00:48:37.310 --> 00:48:39.848
But most importantly, according
to me, the volume is the key there, customer delight is the key there, and the product range is the key there.
Speaker 3
00:48:47.000 --> 00:48:50.662
So what will have an impact on the aftermarket space business
Speaker 3
00:48:50.662 --> 00:48:53.615
because typically the maintenance would come down quite significantly. So how do you see that that is the high margin business also, so, yeah.
Speaker 3
00:49:00.600 --> 00:49:05.387
I think there are. There are many, many apps. There are many
Speaker 2
00:49:05.387 --> 00:49:09.390
features like what we have seen in in smartphones.
Speaker 3
00:49:10.950 --> 00:49:12.140
Already we have.
Speaker 2
00:49:12.870 --> 00:49:19.191
We have got a uh model of uh OT, uh updation for certain features to the customers.
Speaker 3
00:49:21.500 --> 00:49:24.841
And the good thing is there are customers. Not all customers take it, But we are already seeing more and more customers are opting for that. They want certain features, there are want certain
Speaker 4
00:49:32.955 --> 00:49:35.700
updates, which they pay, they pay extra, they pay.
Speaker 3
00:49:37.240 --> 00:49:38.480
So in my view.
Speaker 3
00:49:40.180 --> 00:49:43.220
Mechanical parts, definitely that that needs maintenance.
Speaker 2
00:49:43.830 --> 00:49:45.930
OK, whether it is a chassis or a seat or.
Speaker 3
00:49:46.660 --> 00:49:50.221
The the electric parts where engine, engine parts are not there.
Speaker 4
00:49:51.470 --> 00:50:00.060
OK, definitely this, uh, new. Uh, connectivity features new.
Speaker 2
00:50:01.250 --> 00:50:07.553
Uh annual special features which are going to be updated through
Speaker 2
00:50:07.553 --> 00:50:13.760
OTA's. These are all ideas which are definitely already we have applied it in in IQ.
Speaker 3
00:50:16.680 --> 00:50:20.791
It's extremely good. Almost six, 7% of the consumers are opting for that.
Speaker 2
00:50:22.900 --> 00:50:27.152
OK. And this will continue I'm very sure because uh, our
Speaker 2
00:50:27.152 --> 00:50:31.852
experience shows that there are set of customers even in their
Speaker 2
00:50:31.852 --> 00:50:36.404
their premium, they're super premium, they're deluxe kind of
Speaker 2
00:50:36.404 --> 00:50:40.880
customer. They want certain features which are far superior
Speaker 2
00:50:40.880 --> 00:50:45.357
even in when you look at the St version, there is a 5 inch,
Speaker 3
00:50:45.357 --> 00:50:46.700
there is a 7 inch.
Speaker 3
00:50:47.850 --> 00:50:49.860
OK. We are even thinking beyond
that.
Speaker 2
00:50:51.840 --> 00:50:52.650
So.
Speaker 3
00:50:55.100 --> 00:50:59.690
Whatever you are seeing as the aftermarket and service.
Speaker 2
00:51:01.630 --> 00:51:05.251
A significant proportion is moving into software, going to help the customer in
different ways.
Speaker 3
00:51:12.650 --> 00:51:14.610
OK. More and more I can share.
Speaker 2
00:51:15.960 --> 00:51:17.630
When we launched the product, I can share.
Speaker 2
00:51:18.970 --> 00:51:22.131
Are you still going? This is going to be completely away.
Speaker 2
00:51:22.131 --> 00:51:25.619
There's something which should
keep that in mind, whatever he's
Speaker 3
00:51:25.619 --> 00:51:26.710
saying besides that.
Speaker 3
00:51:31.830 --> 00:51:36.276
Anything else? Thank you. Just one question, sorry, last one.
Speaker 3
00:51:36.276 --> 00:51:40.579
So the current 2 Wheeler market we see is split between
Speaker 1
00:51:40.579 --> 00:51:45.169
the mid speed guys like you had mentioned Okinawa and they seem
Speaker 2
00:51:45.169 --> 00:51:49.543
to be largely in the mid speed segment while the high speed segment relatively high speed segment you have CVS, Bajaj, etc.
Speaker 3
00:51:54.370 --> 00:51:57.410
Uh, what we have noticed is, is mid speed guys, they haven't
Speaker 2
00:51:57.410 --> 00:52:00.401
really invested so much, at least that is our perception. I may be wrong then they haven't invested so much. They're more
Speaker 2
00:52:03.491 --> 00:52:06.632
plug and play kind of guys where they are dependent on imports etcetera. Recently you saw some of the fame 2 subsidies were
Speaker 3
00:52:09.672 --> 00:52:12.812
taken away from Hero Electric and people because they were not localizing so much.
Speaker 2
00:52:14.550 --> 00:52:17.685
Uh, but when we see when you
like you mentioned 10% of the
Speaker 2
00:52:17.685 --> 00:52:20.821
market is already moved in scooters to each includes a lot of these mid speed guys who are just plug and play. How do you
Speaker 2
00:52:24.170 --> 00:52:27.252
see that market evolved? Do you think this mid speed guys
Speaker 1
00:52:27.252 --> 00:52:30.707
because they have not invested, they don't have the right to win and the high speed like yourself you have the right to win. And
Speaker 2
00:52:34.109 --> 00:52:37.138
So as you go into the other product segments like you've
Speaker 2
00:52:37.138 --> 00:52:40.487
Mentioned in the past five to 25 kilowatt you will address. So
Speaker 2
00:52:40.487 --> 00:52:43.676
you will also go down the value chain even maybe the mobile
Speaker 3
00:52:43.676 --> 00:52:44.580
segment electric.
Speaker 3
00:52:44.660 --> 00:52:47.687
Do you think players like you have a better right to win given
Speaker 2
00:52:47.687 --> 00:52:50.570
you have invested so much in technology etcetera, etcetera?
Speaker 3
00:52:51.470 --> 00:52:55.891
I, I I see. I don't want to use, the word right to win. Uh uh I
Speaker 2
00:52:55.891 --> 00:52:59.470
Respect Okinawa. I respect hero. I respect empire.
Speaker 3
00:53:00.680 --> 00:53:03.080
But please Sir, please look at from the customer point of view.
Speaker 2
00:53:04.060 --> 00:53:08.661
Customer point of view when they
buy. If somebody tells them it is 1 1/2 you know you can drive. Maybe your son or daughter can be taken.
Speaker 3
00:53:14.950 --> 00:53:19.449
You have lost the customer at that time, OK. Or you say
Speaker 3
00:53:19.449 --> 00:53:24.430
Normally you have to use only in good roads and range, OK, we
Speaker 3
00:53:24.430 --> 00:53:28.929
have publicized 100 but range will not be more than 70.
Speaker 2
00:53:29.740 --> 00:53:31.480
Some customers will immediately stop that.
Speaker 2
00:53:34.540 --> 00:53:38.502
When you get into the traffic, especially when you are in a uh
Speaker 3
00:53:38.502 --> 00:53:42.340
kind of a flyover, which is let
us say 5 degrees, 7 degrees.
Speaker 1
00:53:43.380 --> 00:53:46.773
And two people are there.
Suppose it says it is not able
Speaker 2
00:53:46.773 --> 00:53:47.250
to pull.
Speaker 4
00:53:48.290 --> 00:53:52.466
OK, so my principle is very
simple. I always tell people
Speaker 2
00:53:52.466 --> 00:53:57.230
that today we are successful in Jupiter or Intel due to certain.
Speaker 3
00:53:58.340 --> 00:54:01.828
I don't like anybody in my company using the word customer abuse.
Speaker 3
00:54:03.160 --> 00:54:04.490
That is customer use.
Speaker 2
00:54:05.940 --> 00:54:10.064
OK, if customer takes 4 people
and they ride, that is the way
Speaker 2
00:54:10.064 --> 00:54:13.789
it writes. If you cannot give
you a product meeting the
Speaker 4
00:54:13.789 --> 00:54:17.780
customer requirements, it may.
It's not that every customer
Speaker 2
00:54:17.780 --> 00:54:20.839
takes their entire family in the
scooter, OK?
Speaker 1
00:54:22.100 --> 00:54:24.560
That 20-30% of the customer.
Speaker 2
00:54:25.620 --> 00:54:29.692
Take their family and and and
scooter and they the roads may
Speaker 3
00:54:29.692 --> 00:54:33.832
be bad roads. Say one of the reasons why we put 12 inches. If
Speaker 2
00:54:33.832 --> 00:54:36.970
the Bat Rd is there, 10 inch
will not suffice.
Speaker 3
00:54:38.480 --> 00:54:43.272
OK. So you have to look at it
from the customer side usage and
Speaker 2
00:54:43.272 --> 00:54:44.490
what happens is?
Speaker 3
00:54:46.650 --> 00:54:48.650
These three companies whom
already said.
Speaker 2
00:54:50.090 --> 00:54:54.352
The customer acceptance has been
coming down because of the word
Speaker 2
00:54:54.352 --> 00:54:58.615
of mouth. Somebody will say no, no, don't buy this. Yeah, I made
Speaker 2
00:54:58.615 --> 00:55:02.616
a mistake. It cannot take the flyover or it cannot take more
Speaker 3
00:55:02.616 --> 00:55:06.617
than two people or the range. What they commit and what they
Speaker 4
00:55:06.617 --> 00:55:08.059
are getting is not OK.
Speaker 3
00:55:09.130 --> 00:55:12.374
On the other side, IQ people
love it because people say it is
Speaker 3
00:55:12.374 --> 00:55:13.160
like a Jupiter.
Speaker 4
00:55:14.200 --> 00:55:16.729
It does every function of
Jupiter plus you get this this,
Speaker 3
00:55:16.729 --> 00:55:18.300
this benefit. So please
understand.
Speaker 3
00:55:19.010 --> 00:55:22.444
It's not right to win. It is
right to win in the customer
Speaker 3
00:55:22.444 --> 00:55:22.800
usage.
Speaker 3
00:55:24.090 --> 00:55:27.015
So whoever is focusing on the customer he has got, the
Speaker 3
00:55:27.015 --> 00:55:29.940
customer decides whether you have the right to be not.
Speaker 3
00:55:31.140 --> 00:55:33.350
Customer usage is not one year.
Speaker 3
00:55:34.380 --> 00:55:38.157
Customer usage is over a period of, you know, five years, six
Speaker 4
00:55:38.157 --> 00:55:41.752
years, seven years. And in
Indian context, I have, I have,
Speaker 3
00:55:41.752 --> 00:55:45.591
I have excel 50, which is even
25 years old, being used by the
Speaker 3
00:55:45.591 --> 00:55:46.140
consumer.
Speaker 2
00:55:47.840 --> 00:55:48.340
Amazing.
Speaker 2
00:55:49.460 --> 00:55:53.431
OK, because they just don't give it to anybody else. They use it
Speaker 3
00:55:53.431 --> 00:55:57.219
and they use it, they repair it,
they maintain it. OK, so the
Speaker 3
00:55:57.219 --> 00:55:58.930
mindset is 10 years minimum.
Speaker 3
00:56:00.180 --> 00:56:02.460
Possible give it to the grandson
or granddaughter.
Speaker 2
00:56:03.540 --> 00:56:03.910
OK.
Speaker 3
00:56:05.060 --> 00:56:09.618
Maybe because of the the pyramid and the income levels.
Speaker 1
00:56:09.618 --> 00:56:10.530
OK, so this.
Speaker 2
00:56:11.660 --> 00:56:15.018
Customer understanding and
giving the durability,
Speaker 2
00:56:15.018 --> 00:56:18.846
reliability and the must be quality. If two people their
Speaker 3
00:56:18.846 --> 00:56:22.944
weight is 100 hundred and 20 KGS, you have to give them that
Speaker 3
00:56:22.944 --> 00:56:23.750
flexibility.
Speaker 2
00:56:26.730 --> 00:56:30.737
Original definition of TVS
since you are you have not come
Speaker 2
00:56:30.737 --> 00:56:33.610
here. You should visit here
earliest time.
Speaker 3
00:56:34.470 --> 00:56:40.160
Uh, then you will see that our
company is the current chairman.
Speaker 3
00:56:41.210 --> 00:56:46.520
Father Mr Srinivasan. His
definition was create a product.
Speaker 3
00:56:47.950 --> 00:56:49.590
Which is on two wheels,
motorized.
Speaker 1
00:56:50.460 --> 00:56:53.697
Which can carry the company
Doctor and company auditor up
Speaker 3
00:56:53.697 --> 00:56:54.870
the Thirupathi Hills.
Speaker 3
00:56:57.880 --> 00:57:01.928
Why? Why? Company doctor,
company uh, auditor? Because
Speaker 3
00:57:01.928 --> 00:57:06.640
they were the heaviest I believe
put together was 150K or 160KG
Speaker 3
00:57:06.640 --> 00:57:07.450
those days.
Speaker 3
00:57:08.470 --> 00:57:10.500
And Tripathi Hills there was no
Rd.
Speaker 3
00:57:16.510 --> 00:57:20.580
Sure, the philosophy was
customer usage, not abuse.
Speaker 3
00:57:22.970 --> 00:57:26.154
The challenge comes for some of
these companies because you are
Speaker 4
00:57:26.154 --> 00:57:28.840
buying some kits and assembling
and giving it you are
Speaker 4
00:57:28.840 --> 00:57:31.030
restricting the different usage
conditions.
Speaker 4
00:57:33.970 --> 00:57:36.817
So it just comes down to cost
then. I mean you will have to
Speaker 3
00:57:36.817 --> 00:57:39.427
come down with the product and
that's to cater to that
Speaker 3
00:57:39.427 --> 00:57:42.560
customer, but it comes down to I
mean the pricing of the product.
Speaker 3
00:57:44.220 --> 00:57:45.650
So thank you. Thank you so much.
Speaker 2
00:57:46.360 --> 00:57:49.288
Sure, Sir. Thank you. Thanks
again. Thank you so much. Thank
Speaker 3
00:57:49.288 --> 00:57:52.072
you. Gonna give a last minute
request. Thank you so much.
09e056e8-3cfb-4cc0-9552-dd50c9a0498c-2
00:57:52.072 --> 00:57:53.080
Thank you. Thank you.
Speaker 3
00:57:54.320 --> 00:57:58.430
So please visit Hosur earliest
and see the plan.
Speaker 4
00:57:59.940 --> 00:58:03.226
OK. In order to give you that
that interest, I'm very proud of
Speaker 3
00:58:03.226 --> 00:58:06.044
our employees. Every week they
implement at least one
Speaker 4
00:58:06.044 --> 00:58:09.279
improvement in their work area,
one improvement in their work
Speaker 3
00:58:09.279 --> 00:58:09.540
area.
Speaker 3
00:58:10.190 --> 00:58:11.070
Every employee.
Speaker 3
00:58:13.690 --> 00:58:17.232
OK. And I have at least 400
employees on a quarterly basis.
Speaker 3
I meet them in their workplace
to give an special award because
Speaker 1
00:58:21.011 --> 00:58:24.554
they implement 100 improvements
in the 90 days, actually 75
Speaker 3
00:58:24.554 --> 00:58:24.849
days.
Speaker 3
00:58:27.970 --> 00:58:31.844
Now we have more than 800
families, they call it as home
Speaker 4
00:58:31.844 --> 00:58:32.320
Kaisen.
Speaker 2
00:58:33.120 --> 00:58:38.061
There, the supposes implement
improvements on education,
Speaker 3
00:58:38.061 --> 00:58:41.790
energy, safety, environment,
housekeeping.
Speaker 2
00:58:42.820 --> 00:58:45.190
OK, in their house and around.
Speaker 1
00:58:50.470 --> 00:58:53.100
OK. Thank you. OK, thank you so
much.