TURNAROUND STRATEGY FOR

TVS MOTORS
 Industry Analysis- Current Scenario
Two-wheeler
• In the domestic market, two-wheeler industry sales grew from 202 lakh units in 2017-18 to 212 lakh units in 2018-19,
registering a growth of 5% over last year. The first half of the year saw a growth of 10% in two-wheeler industry, led by growth
in economy motorcycle segment. On the other hand, second half saw a decline of 0.8% led by slowdown in retail demand on
account of increased insurance costs, retail finance crunch and fuel price escalation.

• Scooter as a category, lost share for the first time since 2007-08. Scooters registered a marginal decline of 0.3% over 2017-18.
• The motorcycle category grew at 8% (136 lakh units) over the last year. Within motorcycles, the premium segment grew by
13% from 18.9 lakh units in 2017-18 to 21.3 lakh units in2018-19.

• In the international market, two-wheeler industry had a growth of 17% over last year.

• Crude oil prices remained above $65/ barrel for most of 2018-19 touching $80/ barrel in October 2018may lead to higher costs
for customers and OEMs.

• The trend of increased crude prices and improved exchange to local currency is expected to aid export market growth especially
in oil dependent economies.

• Improved foreign exchange availability in Africa further aided the growth of export industry over last year.

• Latin America, Africa and few countries in Asia are some of the markets where demand improvement was witnessed.
 Company Analysis- Current Scenario

Subsidiaries Associates
1. Sundaram Auto Components Limited, Chennai Emerald Haven Realty Limited, Chennai and its subsidiaries.
2. TVS Housing Limited, Chennai Ultraviolette Automotive Private Limited, Bengaluru
3. TVS Motor Services Limited, Chennai
4. TVS Credit Services Limited, Chennai
5. TVS Two-wheeler Mall Private Limited, Chennai
6. TVS Micro Finance Private Limited, Chennai
7. Harita ARC Private Limited, Chennai
8. Harita Collection Services Private Limited, Chennai
9. TVS Commodity Financial Solutions Private Limited, Chennai
10. TVS Housing Finance Private Limited, Chennai
11. TVS Motor Company (Europe) B.V., Amsterdam
12. TVS Motor (Singapore) Pvt. Limited, Singapore
13. PT TVS Motor Company Indonesia, Jakarta
14. Sundaram Holding USA Inc, Delaware, USA
15. Green Hills Land Holding LLC, South Carolina, USA
16. Components Equipment Leasing LLC, South Carolina, USA
17. Sundaram - Clayton (USA) LLC, South Carolina, USA
18. Premier Land Holding LLC, South Carolina, USA
 PRODUCT PROFILE
TVS Max 100 Expansion
TVS Max 100R
TVS Max 150 category
TVS Champ TVS Samurai
TVS Victor
TVS XL TVS Fierro
TVS XL Super TVS Sport
TVS Star City
TVS Centra TVS Scooty KS
TVS Apache
TVS Radeon TVS Scooty ES
TVS Scooty Pep
TVS Spectra KS
TVS Spectra ES
TVS Jupiter Grande
TVS NTORQ 125
Raw materials Inspection Stores
consumption

Inspection Paint Shop Fabrication

WORKFLOW MODEL

Machine Shop Engine and Vehicle Leak Testing

Assembling

Dispatch Final Inspection

 BOARD OF DIRECTORS
ORGANIZATION STRUCTURE
MANAGING DIRECTOR

EXECUTIVE VICE PRESIDENT

PRESIDENT

PURCHASE MARKETING SALES

OPERATIONS R&D QUALITY ASSURANCE HRD & TQC INDUSTRIAL RELATIONS BUSINESS PLANNING FINANCE

CORPORATE
INFORMATION SYSTEMS INDUSTRIAL BUSINESS PROGRAM SCOOTY PROGRAM MOTORCYCLE PROGRAM MOPED
COMMUNICATION
FINANCIAL ANALYSIS
FINANCIAL RATIOS OF TVS MOTORS
Return on Capital
Current Ratio Employed
2019- 0.65 2019- 22.04%
01 2018- 0.66 03 2018- 23.87% 05

Operating Profit Quick Ratio P/E Ratio

Margin
2019- 0.56 2019- 22.47
2019- 7.87% 02 2018- 0.51
04 2018- 23.18
2018- 7.46%
 COMPARISON CHART
Growth in number of employees Change in assets per employee Change in cash flow per employee
200

100

-100

-200

-300

-400
2017-18 2018-19 2019-20
Growth in number of employees 0.515267176 -1.57584963 -1.215277778
Change in assets per employee 18.47040925 118.6941051 28.13882153
Change in cash flow per employee -24.44811463 -50.8084523 -358.3883543
 Comparative Analysis of Competitors
70

60

50

40

30

20

10

-10

-20

-30

2017-18 2018-19 2017-18 2018-19 2017-18 2018-19

TVS Motors Hero Moto Corps Bajaj
ITR Current Ratio ROCE(%) Operating Profit Margin(%)
TECHNOLOGICAL ANALYSIS
VIEW 1: CRM ASPECT
Earlier System Existing Problems Current System

• New design finalization time- 32

• SAP ERP Being used days. • SAP-PLM: It would enable us to collaborate
by TVS which bridges on more than one product at a time.
distributer’s • Design team also found it difficult to
access full performance histories of • New design finalization time- 12 days.
demands with • The sharing of data between SAP PLM and
company’s various components, resulting in NPD
cost and time overruns. SAP ERP can accelerated return on
production plan. investment, as well as ability to integrate
third-party solutions like the CAD viewing
software from Adobe.

Use or disclosure of data contained on this sheet is subject to the restriction on the title page of this proposal or quotation.
• Lightning Essentials - $25/User/Month

• Lightning Professional - $75/User/Month

• Lightning Enterprise - $150/User/Month

• Lightning Unlimited - $300/User/Month

VIEW 2: INVENTORY AND PROCESS
FLOW ASPECT
Hero Moto Corp BAJAJ Auto TVS Motors

• Uses RFID Tags to track its • Uses RFID Tags to track its • Uses traditional counting
progress through the progress through the methods across the assembly
assembly line. assembly line. line.
• Changed its focus of • Continuing distributor-based • High volatility faced from the
inventory management to inventory planning approach supply chain entities due to
Vendor Managed Inventory and faces bull-whip effect in complex chain interactions.
approach. the entire supply chain.
Integrated Information Flow with RFID
RFID Structure
 LIMITATIONS OF CURRENT SCENARIO
 Decreasing ITR over the years for TVS Motors implies that the current system is unable to match
production with demand.

 Decreasing trend of cash flow per employee and number of employees over the years implies that the
current system is unable to generate cash inspite of downsizing activities.

 Although the profit margin is increasing, the current ratio and ROCE is decreasing over the years which
implies the current system is unable to utilize its capital on production and profit generation- Resource
misutilization.

 P/E ratio is also going down over the years which implies that confidence of investors is going down in
the market.

 The existing system uses a nascent version of CRM infrastructure which is has limited features as
compared to other options available in the market- probable reason of customer dissatisfaction and
inefficient workflow.
 OBJECTIVES OF THE PROPOSED SCENARIO

 Increase the fluidity of internal systems to synchronize with the market conditions and drive the
market as per its requirement.

 Improve the topline and bottom line with a sustainable outlook.

 Revitalize the business capabilities which could supplement the expansion phase of the
company.
 PROPOSED SCENARIO
 As the prices of vehicles are increasing due to increasing production cost and pressure of
increasing profit margin, the company can go for cost-cutting strategies like standardization of
work, QC/KAIZEN activities and revised HR policies(implementing bracketed pay schemes linked
with production, restructuring and upskilling of workforce).

 Use of RFID technology which can benefit the information flow across the entire supply chain
decreasing the market mediation cost, inventory holding cost and increasing service level. Here,
the benefits earned would be greater than the price incurred per unit of product sold due to
increasing volume of products (20% expected growth in sales in coming quarters).

 Instead of using SAP CRM and SAP PLM for resource planning and customer interaction
interface, it should go for Salesforce automation technology which can provide a competitive
edge with large number of features over any other platforms like Siebel.
 REFERENCES

 https://www.moneycontrol.com/
 https://www.tvsmotor.com/
 Bloomberg Terminal
 https://www.wikipedia.com/
 https://www.cmie.com/
THANK YOU