|Chennai, Financial Express -- In a bid to tap the ASEAN market, TVS Motor Company has decided to set up a full-fledged manufacturing facility in Indonesia. The plant, to be set up at a cost of $50 million, will have an initial capacity of producing 120,000 two wheelers per annum. It is expected to start production in little over an year?s time.
Speaking to the media, TVS Motor president CP Raman said that the company chose Indonesia as it was the third largest two wheeler market in the world with a volume of 4 million two wheelers. It is the largest market in the ASEAN and enjoyed a strong growth rate (last year it was 35%).
?If we are to become an international player, the region to go into was SE Asia and the country was Indonesia,? he said. The facility in Indonesia will also be the hub for reaching out to other markets in ASEAN region.
When asked about the products to be launched in Indonesia, Mr Raman said that the market research was on and the company would soon shortlist what the Indonesians would like to buy. He said that 90% of the market there was step-through models. ?We hope to get 5% market share, roughly 200,000 units, in Indonesia in three years after launch,? he added.
He said that no final decision has been taken on how to structure the Indonesian foray - whether as a joint venture or a 100% fully-owned company. Indonesian law, he said, permitted 100% FDI.
The company has organised a $100 million line of credit from HSBC and ABN Amro and together with internal accruals, would be enough for Indonesia project and two other local projects, Mr Raman said. © fe