Low-cost cars not to affect bike market: TVS

New Delhi: An industry official on Friday said that Tata Motors' Nano is unlikely to wean away buyers from the two-wheeler segment.

"I don't ascribe to the idea that the introduction of low priced cars in the market will affect the two-wheeler segment," PTI quoted S Balasubramanian, Executive Vice-President for operations and marketing in TVS Srichakra Ltd, as saying.

"As of now, only five per cent of population in the country has a vehicle," he said.

The potential market of those using cycle and motorcycle was still "very large". "A potential customer of cycle cannot go and buy a car," he said, adding that any new economic car's entry in the market was a welcome step.

Tata Motors showcased Nano last week. The car will be sold at a dealer price of Rs 1 lakh. This is comparable to some premium bikes that cost as much as Rs 80,000.

Noting that the two-wheeler segment was growing "enormously", he said the number of vehicles sold in 2006-07 was 85 lakh and it is likely to touch 86 lakh this fiscal.

"In each month, at least seven lakh two-wheelers are sold in the country," he said, adding that last year, a growth rate of 38 per cent in the two-wheeler segment was witnessed.

TVS Srichakra is a major supplier of tyres to TVS Motors, Hero Honda, Bajaj Auto and Yamaha. It is aiming at a revenue of Rs 540 crore this fiscal from Rs 468 crore last fiscal. Exports contribute around 16 per cent to total sales.

"Our plant at Madurai in Tamil Nadu has a capacity to manufacture 11 million tyres per year," he added.