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TVS Motor Company Ltd. — Call Transcript 2022
Dec 5, 2022
61489_rns_2022-12-05_cf5587a3-066a-4221-a5fd-5d7ece62baba.pdf
Call Transcript
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5[th] December 2022
==> picture [244 x 45] intentionally omitted <==
BSE Limited, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai 400 001. Scrip code: 532343
National Stock Exchange of India Ltd Exchange Plaza, 5[th] Floor, Bandra-Kurla Complex, Bandra (E), Mumbai 400 051. Scrip code: TVSMOTOR
Dear Sir(s)/Madam,
Reg : Compliance under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
In continuation to our intimations dated 28[th ] 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 KELLIYA Digitally signed by KELLIYA SUBRAMANIAN SUBRAMANIAN SRINIVASAN Date: 2022.12.05 19:41:18 SRINIVASAN +05'30' K S Srinivasan Company Secretary Encl. a/a
Website : www.tvsmotor.com Email : [email protected] CIN : L35921TN1992PLC022845
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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
the.
Speaker 2
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.