GOING PLACES: PT TVS Motor Company Indonesia unveiled TVS Neo in Jakarta on Tuesday.

JAKARTA: TVS Motor Company is revving up for its maiden manufacturing initiative abroad. The TVS Neo, which will spearhead the company's ambitions in Southeast Asia, is now undergoing trial production runs at the company's Indonesian plant, and will hit Jakarta's roads next month.

"This is the next phase for TVS in the global market,'' said B. L. P. Simha, President Director of PT TVS Motor Company Indonesia, as he showed Indian journalists around the 50-acre campus in West Java on Monday. This facility, with an annual capacity of three lakh vehicles, will eventually be the company's manufacturing hub for exports to Malaysia, Vietnam, Thailand, Myanmar and Cambodia.

Step-through model

The 110 cc Neo is a step-through model, known locally as a Bebek, and will be available in three variants with four colour options. Bebeks, mostly manufactured by Japanese giants Honda, Yamaha and Suzuki, make up over 80 per cent of Indonesia's two-wheeler market. By March 2008, TVS Motor hopes to gatecrash into the Japanese party by selling one lakh vehicles, thus grabbing two per cent of the market. Mass production is slated to begin after a formal inauguration later this month. Initially, only 40 per cent of the Neo's components will be made in Indonesia, with the newly developed Duralife engine being shipped in from India.

TVS Motor has invested $45 million in the project so far, and much of the $55 million to be invested in Phase II will be devoted to increasing localisation to 80 per cent and developing new products. "In three years, we will have a complete portfolio of two-wheelers: bebeks, sports bikes and skubeks (variomatic scooters),'' Mr. Simha said. In fact, the TVS Apache, which proved extremely popular at last year's Jakarta Fair, could be imported from India in time to hit Indonesian roads as early as July.

However, TVS Motor has learnt from the mistakes of Chinese entrants to the market and will not offer any vehicle until it has a service network backing it.

"We intend to secure the confidence of the Indonesian customer that TVS is here as a long-term player. It's easy to come in and market bikes, but we don't intend to do that without the spare parts and servicing stores, a complete support system,'' K. Vijaya Kumar, Director of sales and marketing, said, adding that 100 dealerships would cover six provinces by next March.

The company is holding its cards close to its chest on the pricing front.

"It will be competitively priced,'' Mr. Simha said. However, he hinted that the Neo would be closer to the Japanese models, whose price tags range from 10 to 15 million rupiahs (Rs. 50,000-75,000), rather than the cheaper and less reliable Chinese models. Pricing influenced perception and TVS wanted to be perceived as an international quality company, he said.

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