TVS Motors to ride up north

In an exercise aimed at leaving its southern brand image for one that is pan-Indian, Chennai-based TVS Motor Company is setting up a plant in the North.

The company is in talks with the Uttaranchal government to set up a plant in the state. This will be TVS Motors' third plant. Its two existing production facilities are located at Mysore and Hosur in Karnataka.

When contacted, Venu Srinivasan, the chairman of TVS Motors, confirmed the development though he added discussions were at an inchoate stage and it was too early to talk of the capacity planned and the investments involved.

But sources in the State Industrial Development Corporation of Uttaranchal (Sidcul) said TVS Motors was likely to zero in on Pantnagar to set up the facility. This is one of the three sites identified by the state government to be developed as industrial clusters, the other two being Hardwar and Sitarganj.

TVS Motors is the third-largest two-wheeler company in the country after Hero Honda and Bajaj Auto. Although it is a strong player in the moped and scooterette segments, the company lags behind Hero Honda and Bajaj Auto in  the motorcycles market.

Auto industry experts said this was because the company was being perceived as a southern brand. A production unit in the north India could address this problem.

Apart from the image makeover, TVS Motors could be interested in the tax breaks offered by Uttaranchal.

Under a special scheme notified by the Centre for the development of the northern hill states, new production units in Uttaranchal are exempt from sales tax for a period of ten years. "We offer power in the state for industrial users at Rs 2.05 per unit, while Haryana offers it at Rs 4.25 per unit," Sidcul officials added.

Uttaranchal is hoping to attract investments to the tune of Rs 10,000 by the end of this year. "About 40 per cent of this has been tied up. The land we had earmarked at Haridwar has almost been sold out," top state government officials told Business Standard.

It is worth noting that Hero Honda has already announced it will invest Rs 550 crore (Rs 5.50 billion) to set up its third plant at Haridwar.