Lucas-TVS diversifies into car accessories
TVS Group Company Lucas-TVS Ltd has entered the retail car accessories business through its subsidiary Lucas India Services.
According to TK Balaji, managing director, Lucas-TVS, “We want to establish our reputation in this segment. Once we achieve that, we would then know how to handle the business. I am not particularly passionate about franchising.”
Carplus is billed as an organised retail chain offering a complete range of car accessories. These ‘all under one roof’ stores will sell genuine products from a wide range of leading brands to suit all cars. The first Carplus store, spread over 4,000 square feet, is located in Gurgaon. “With new passenger car models being launched in India, the car accessories market is all set to witness exponential growth over the next few years. Currently, 35-40 percent of the total car accessories market, estimated at Rs 4,200-4,500 crore, lies in the unorganised sector. It is imperative, therefore, for players like Lucas to carve a niche in the mind of the consumer and bring home the value proposition,” said Arvind Balaji, director, Lucas India Services.
He further added that increasingly car owners see their vehicles as a reflection of their personality and are looking for improved safety, entertainment, convenience, connectivity, style and maintenance.
“With Carplus we hope to cater to the spiraling demand of urban customers, who today have the ability to pay more. The store has been designed to address all customer requirements and the products on offer are the best available in the market, offering value for money,” said Sandeep Abbi, president.
Downturn delays plans
Meanwhile, the Chennai-based Lucas-TVS Group's targeted turnover of Rs 3,700 crore by 2010-2011, a target set as early as 2007, is set to be revised. According to the Group managing director, TK Balaji, “We were on the right track but the recent economic downturn has set back all the plans. We probably will get there but not in the time frame we thought; it’s likely there will be a delay of a couple of years. Our electrical division, however, will constitute the largest chunk of our revenues, probably as much as 40 percent,” he stated.
Lucas-TVS is a preferred supplier to leading vehicle manufacturers in India and it also supplies products to the OE and aftermarket in North America and Europe. It has seven plants in India including two in Pondicherry and one each in Padi (Chennai), Rewari and Pune. Two new plants, for starter motors and alternators respectively, have been set up in Uttarakhand.
The company’s foreign ventures have not exactly taken off. “We are selling starter motors in Iran and want to engage in alternators, wiper motors but things have not developed as we expected. We see big potential in Iran, which produces nearly a million cars, but the political issues there are affecting us. We will continue to export as well as locally manufacture products but the issue of handling the business needs to be sorted out,” Balaji explained.
As for Indonesia, he said, “We had plans to set up a plant in Indonesia but the conditions have changed. We are exporting a significant amount of motors to the country.”
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