Study On TVS Motor Education Essay

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TVS motor company has its origin in sundaram Clayton limited, moped division, started in 1980. The factory was started in hosur, Tamil nadu in southern India. The first product launched was a 50 cc moped, which appealed to the masses because of its capability to carry two people. In the same location, the same promoters started another company in 1984, in collaboration with Suzuki Motor Corporation of Japan, for the manufacture of 100 cc motorcycles under the brand name of ind-suzuki motorcycles. Subsequently in the moped division was bought by ind-Suzuki motorcycles in 1987 and the company changed its name to TVS Suzuki ltd. even though the company started producing all kinds of two wheelers.


MAJOR PRODUCTS:-


Motorcycles:-

  • TVS MAX 100
  • TVS Samurai
  • TVS Shoaling
  • TVS Shogun
  • TVS Apache(150 cc,13.7 Ps @8500rpm)
  • TVS Apache RTR 160
  • TVS Apache RTR 160 EFI (Electronic Fuel Injection)
  • TVS Apache RTR 180 (17.3ps)
  • TVS Flame
  • TVS Flame (125 cc, cavity technology)
  • TVS MAX 100
  • TVS MAX R 100
  • TVS Star
  • TVS Star City
  • TVS Star Sport
  • TVS Supra
  • TVS Victor (110 cc)
  • TVS Victor EDGE (125 cc)
  • TVS Victor GLX (125 cc)

MANAGEMENT DISCUSSION:-

During 2008-09, two wheeler industries grew by 5% with the sale of 8.4 million units. The recent financial crisis, reduced liquidity, lower economic growth and restricted availability of retail finance had a negative impact on the Indian two-wheeler industry, especially in the third quarter of 2008-09. However, the situation improved marginally inQ4 post the fiscal and monetary interventions by Government of India.


The Company recorded a growth of 5% in two wheeler sales. This was aided by an impressive 44% growth in exports. The launches of Scooty Streak, a tough and trendy variant of Scooty Pep+ and Apache RTR RD, premium segment motorcycle offering incomparable performance, have reinforced the Company's significant position in the ungeared scooter and the premium motorcycle categories. During the year, the Company launched its three-wheeler, TVS King in six states and acquired a market share of 5%. TVS NEO, a bebekexclusively developed for the Indonesian market for the subsidiary PT. TVS Motor Company Indonesia, has gained notable acceptance in the highly competitive Indonesian market with its superior style design and quality. Parts business grew by 11 %.


The Company achieved annual two wheeler sales of 1.34 million numbers, a growth of 5%from 1.28 million numbers sold in the previous year. The turnover increased from Rs. 3,310crores to Rs. 3,741 corers. The profit after tax (PAT) of Rs. 31.08 corers for the year was marginally lower than the previous year's PAT of Rs. 31.77 corers due to increase in interest & finance charges and cost of raw materials and components especially in the first half of the year.


The Company is looking forward to consolidate its position in the executive motorcycle segment with introduction of new model motorcycle coupled with the re-launch of “Flame". The Company further plans to launch more new products and also aims to increase its reach in the unrepresented towns of the country.


CHANGE IN SHARE PRICE OVER A YEAR:-

The two wheeler industry has been on a strong growth trajectory in the past years. Easy availability of retail finance with low down payment schemes, increasing household incomes and launch of more stylish and fuel-efficient motorcycles, had enabled the industry to grow at a rapid pace till 2006-07. After a decline of 4.5% during 2007-08, the two wheeler industry grew by a modest 5% during 2008-09.


Domestic motorcycle sales marginally grew by 1 % while exports recorded a growth of24% .Ungeared scooter, which are less dependent on retail finance, registered a growth of12% and mopeds grew marginally by 2%.


In the motorcycle category, the Economy segment suffered maximum decline of 15%, as this segment is most sensitive to retail finance. The Executive segment increased by 15%aided by launch of new products by leading manufacturers. Premium segment recorded growth of 7% over the previous year. The category share of motorcycles came down marginally from 82% in 2007-08 to 81% in 2008-09.


CAPITAL STRUCTURE LAST 3 YEAR:-

Financing decision is the second important function to be performed by the financial manager, broadly, he or she must decide when form and how to acquire funds to meet the firm's investment needs. The central issue before him or her is to determine the appropriate proportion of equity and debt. The mix of debt and equity is known as the firm's capital structure. The financial manager must strive to obtain the best financing mix or the optimum capital structure for his firm. In the absence of debt, the shareholder's return is equal to the firm's return. The uses of debt affect the return and risk of shareholders; it may increase the return the equity funds, but it always increases risk as well. The change in the shareholder return caused by the change in profit is called the financial leverage.


A proper balance will have to be struck between return and risk. When the shareholder return is maximized with given risk, the market value per share will be maximized and the firm's capital structure would be considered optimum. Once the financial manager is able to determine the best combination of debt and equity, he must raise the appropriates amount thought the best available sources. The firm's capital structure is considered optimum when the market value of share is maximized.

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