TVS Motor Company Limited (532343) Earnings Call Transcript & Summary

So once -- so I will just introduce the team to you and then you can start the meeting. Yes, use this, sir. Hi, good morning, Mr. Radhakrishnan. This is Janet Mattha from B&K Securities.

Yes. Good morning. Good morning. Sorry for the delay from our side.

No issue, sir. Thank you so much for making time, sir, for this call. So we got the team of Canara Robeco led by Mr. Shridatta Bhandwaldar, he's the Head Equities. We got the fund managers Ms. Ennettee Fernandes, Mr. Vishal Mishra. We also have the CIO offshore of Mr. Abhay Laijawala and Fund Manager offshore Mr. Dhrushil Jhaveri. And we have the sector specialist Mr. Bibhishan Jagtap. I has added the recording, so I will leave this call. It's a one-on-one call. Thank you so much for taking time out, everyone. Over to you, sir.

Sure. Thanks a lot, Mr. -- good morning. Thanks a lot, Mr. Radhakrishnan and Mr. Desikan for actually sparing time for us. We have been shareholders for some time with the company and have it participated in group interactions, but probably this is the first one-on-one interactions -- interaction we are having with you, and that's really thanks for sparing time. So we have certain -- the format would prefer question and answer. We have certain questions that we have prepared. And our team will go through it. For convenience and coordination purpose, would let Bibhishan ask who's the sector analysts asked most of the questions because -- since this is a virtual meeting, the to become a cost in terms of people actually getting kind of cutting each other. So let me just start at 1 point and then I'll hand it over to Bibhishan. Basically, the drivers for the industry and particularly for us, one of the drivers that has played out extremely well for us and competition for that doing such a great work on that side has been on export side. It has reached a sizable chunk of our business now. But lately, given the challenges that we have seen in the exports market, and particularly the larger peer has faced in fact, more challenges than you. How do you see this piece working out? What are the key challenges in the top 3 markets there? And do you think that it will persist for a longer period or it will be a 3-, 6-month phenomenon? So I'll start there and for then Bibhishan can take most of the questions, and we will interject whenever it is needed.

Thank you, and good morning to all of you. I think what the most important is -- this is not the first time we are seeing such challenges in developing markets. If you look at -- while we are doing now the business, there is Sri Lankas. Sri Lanka is doing one of the best markets for us, okay? We used to sell almost 6,000, 7,000 and our market share almost reached 35%. But economy as the challenges in Sri Lanka. It will come back because they can't be without 2-wheelers industry lead, but we have to be a little patient. Then if you look at Myanmar. This is another country, we had a huge opportunity. We started off very well. There are some challenges. And if you look at Iran, it's another market where we used to be extremely well. Our Apache and Wego used to -- and Rockz from Indonesia used to be extremely well accepted. Now there are some sanctions and challenges. It's not that the customers in these markets are still liking TVS and it will come back. We have to be patient, okay? Now whatever we are going through in African countries I think we have seen it in the past, whenever we have seen the oil prices or inflation or availability of currency, okay? My hypothesis only one thing. If there is some problem in one place, I think you have a good product range. Maybe a couple of months. Immediately, we will not be able to respond in 1 month or 2 months because there have been a stream of things. And we actually still in Nigeria, the retailing is happening. It's not that there is 0 retail, okay? Whatever you read in the media, it's banned and things like that. Our approach has been always manage the stocks pretty well with the distributor, whether it's inside the company with a distributor. So we have practically stopped dispatching to Nigeria saying that, look, you liquidate all the stocks, okay? In a couple of months, we will be able to do that to the retailer. And then we can start. And at that time, we will take a [ meshed ] call. But in the meantime, there are many other markets where we can start a little bit doing higher. For example, we are extremely well in [ DR Paco ]. We are doing extremely well Ethiopia. We are doing very well in Tanzania, Uganda. So in my view, these challenges, whatever we are talking about slowness or some challenges in some markets. Without Sri Lanka, Iran and Myanmar, we have reached these numbers 100,000. So I'm pretty confident that going forward, I'm not disturbed. What is most important is customer start disliking you, that is the most important thing, okay? Then you have a problem, okay? Inflation, some local government bans and there are solutions. For example, there are markets where we have given certain facilities to track who is using. With our technology, we have driven in certain markets, and we are also planning to offer that in these markets because these markets, the biggest challenge is they're not able to trace the [ radar ], okay? As a part of the retail financing company requirement, we have also put certain telematics so that you can track exactly and, you can also disable the vehicle if the customer doesn't pay on time. So the same technology can be used. So I'm not so much worried about the short term ban what you see in Algeria. From the country side, please understand, they cannot continue the bank for a longer time because this is the main, main income. They have so many millions of taxi drivers. What will the government do if these people doesn't have job. So what they need to look at is, what is it they need to do to trace these customers, how they are using it, how they are, where they are going, okay? So I'm pretty confident. We have seen in 3-wheeler also several times banned in these countries. But it has now come back. So I'm pretty confident what is most important is consumer confidence on the brand should not go away. And we have excellent -- even in Sri Lanka, Myanmar, Iran, our distributors are still there. They take care of the service of the existing vehicles. They are under a little bit of pressure. But our team has been supporting them saying that you focus on service parts. And in there, you make profitability, working with the customers, that has been our theme and Sri Lanka has done it. Myanmar has done it. Iran has done it. So they are all looking forward to a day when the imports will be open.

Can that also LatAm is one which is doing then, right?

Yes. LatAm and ASEAN markets are huge opportunities for us. We have started a little bit increasing those markets. So overall, I'm not afraid about the market share growth and we're growing ahead of industry.

Sir, just some question on the same thing. Over the last 5 years, we have put in place the entire distribution infrastructure, the branding has happened. The customer associate you with a very good product. When you look at these markets, which are the end markets that you're targeting across Asian or Latin America or African, Middle Eastern countries. Where do you see the potential of whatever numbers that we are doing, say, 3, 5 years down the -- of course, the organization has to gear up to do that for a medium term, and I assume that you would have kind of thought around it in terms of how do you scale up this business? And what is the scalability that is possible? For why I ask this question is basically, there are a lot of analysts who keep writing, particularly about Nigerian market that, okay, already you guys plus Bajaj, plus Chinese guys are like the market is saturated. So there is not much of scope to grow apart from the organic growth. So when you look at your current kind of broader numbers, on annual basis. Can they double, triple over the next 5 years if you actually look at your target markets in terms of scalability and your presence as infrastructure and brand in those respective countries.

Thing have happened. I think the first thing is this was a high penetrate Chinese market with very low prices, okay? Then Bajaj entered. And when we entered, we said that, look, our prices are far, far higher, but we give a better total cost of ownership. For example, if a Chinese product, they buy at $350 or $400 and usability is 12 months. We said our product can be 3x better than that. Our durability, reliability, usage, customer convenience and after-sales service will help you to use it for 3 years, but our prices are $500 or $550. And we will have a mechanism to make sure that there are proper service centers, parts, oil, everything, and they will take care of you. Initially, there was a huge resistance saying that, no, we don't have money to buy $100, $150 is a huge money. But we still stayed there and a few people bought it there, the customers, the people realize that Indian brands are far, far, far superior. So what has happened is the Chinese proportion has come down. Now Indian brands are doing extremely well in Africa. This is number one. Number two, you asked about the potential of this market. I can tell you this is the market to be in, okay? They don't have roads. They don't have a commuting segment. It is like 30 years, 40 years back in India, okay, no roads, no public transport, but a lot of natural wealth but education levels are very low. And I don't want to use the word who have been exploiting this set of people. They have oil but they don't have refineries, okay? So I think this is the market with education, there are many people who are going for education from these countries, coming back, settling down and investments in infrastructure like roads and connectivity. I am 100% sure you will see a significant, significant proportion of growth in the 2-wheelers. First, it will move from taxi segment in addition to taxis, you'll say it's commuting segment, you will see motorcycles, you will see scooters. Maybe you will also see EV coming in much faster because at least in the cities, they will say that no, we have to be progressive. Because like India is comparing Europe. I think these people will start comparing countries like India and saying that India can progress like this, why not, okay? So I don't want to give you guidance, but I promise you, these are the markets to be in, okay? And we are in. We have an excellent product range from HLX series to moped and to scooters, to motorcycles, to Apache, to RR 310 from products from Indonesia. And this is going to make a huge difference. Just to give you a perspective, in the last 4 years, industry CAGR was 9%, we are at 18%. You want to put any mathematics, put the same mathematics for the future. I promise you that. Double the number...

That's a great number to work with, sir.

Yes. Sir, is it possible for you just to give us a sense how -- which are our top 5 markets and how much does Africa and the other major countries contribute to us? especially in Nigeria?

Overall, Africa is about 50%, okay? I don't want to give a breakup of that, how each country, right, et cetera, et cetera. I think this keeps changing in my view because every month it keeps changing, okay? Because every country is wanting to expand. Everyone -- every country is now investing in infrastructure. So this is a number, which will keep growing. Overall, as in Africa will keep growing. Number two, I think we had Asia market significantly higher, but with no Sri Lanka, now it is Bangladesh, Nepal, okay? Even Myanmar is not there. So Bangladesh and Nepal are the key markets on this side. And if you look at the Middle East, then you have Turkey, then you go back to LatAm, the entire LatAm is a huge opportunity. Then here, you look at Indonesia, Malaysia, Philippines, Laos, Cambodia, okay? So we don't export to China, okay? And we don't -- only through BMW that our joint partnership, we send it to all developed markets today. For example, Europe or U.S. or Japan or any other country, it is the [ CVs ], but we make more than 100,000 vehicles we have given to these customers in this market. So that is the overall breakup.

Understood. Understood. And sir, which are the markets we are the market leader currently or probably we are #2, #3 player. If you can just.

We have most of the market, we are a strong #2. There are a few markets we are #1.

Okay. Such as?

See, there are markets like Ethiopia, Tanzania, Kenya, okay? So see, the reason I don't want to give number one, number two. I think the direction is more important. I don't play to be some numbers one, okay? I don't want to -- I want to be number one in the customer consideration. If you're number one from the customer consideration then we can grow the market ahead of the industry. I have a simple rule. We don't know the denominator, which is the industry. We have to be growing faster than the industry.

Got you. Understood. And sir, just a question on the export margins. I mean, is it fair to assume that the export margins are slightly higher or better as compared to the TIC market? How should we look at that aspect?

See, margin, to me, overall margin is what we will look at it. Some markets, certain brands. See, we have the best range starting from moped to scooter to motorcycle to [indiscernible] motorcycles to Apache to RR 310. As a company, we look at overall contribution, overall gross margin because unless some of my competition, we are now into expanding the business. Three very clear objectives. Number one is customers should be delighted with TVS, product durability, renewability, attractive quality, features, services, aftersales care, I think that is the first priority. If this is done and you have exciting products, both existing products and new products, which kind of features, what we do, then you can grow ahead of the industry than the top line is assured, okay? I'm a firm believer that if the top line is assured, every line is assured, okay? You can have any number of contribution. You can even 30% gross margin also. The top line is not there anything multiplied by the local number is not going to be help you. So the most important thing, first is customer satisfaction. Second is top line because top line is what the distributor dealer also the supplier wants. Any business volume is the most important thing. If the volume is not there, nobody wants to participate with you. The suppliers in this kind of a business, you need to have investments not only from now, the suppliers have been to invest. They should have the belief with you. The dealer has to invest. The distributors have to invest, correct? Everybody has to invest in infrastructure, people, subdealers. So that is required, the volume is required. The brand is required. Once these 2 comes, you have seen our profitability. Then you can perform, okay, can I sell more of a premium? Can I sell more of Ntorq 125, Apache and the kind of products in -- we started off with Apache 162 2V, then 4V then 180 and 200 and 310, we move like that. Even in Jupiter, when we started, we had a base version. But we said that, that is not going to give me profitability. I need to improve the profitability. So we do a [indiscernible] version, we give a classic version, [indiscernible] version. And recently, we have launched [indiscernible] and all are higher price than competition. So today more than 50% of the sales of Jupiter is from those models which are higher on pricing, but we give better features, better attractive quality to the consumers.

Understood. Understood. Sir, just one last question on the export market. I think the kind of turnaround which we have seen in the Indonesia market, where initial 4, 5 years was not good, but the last 2 years where we have seen a significant improvement. I think this particular geography or this particular aspect will continue to do well, right? We do not expect any major headwinds to come?

In my opinion, we can grow exponentially because the acceptance of the products in the markets are extremely, extremely with extremely good. So we started out 2,000, 3,000. Now we are hitting every month, almost 10,000. We have now started 3 wheelers. Now the 10,000 can be easily multiplied by 2. And we have a separate platform of products starting from Neo, [ Ros and Das ]. So the benefit is it will multiply and the more the volume, definitely, you know the benefits of what it can give to the total company. So TVS will do extremely well.

Sure. Sir, I think congratulations on the TVS Ronin, I think I personally rode that vehicle, truly amazing. Just wanted to understand, I mean, what is the product positioning of that particular model? Is it more of a retro, cruiser, tourer. I didn't get that. If you can just help me understand the product positioning of that 1 particular aspect.

You are certainly saying it is a modern retro vehicle, okay? It is not completing because many people ask me, are you competing with RE, no, no, no. See, when -- see, we look at Apache. Apache is standing for really the racing enthusiast. When we started the journey, many people that don't know India, you don't have racing enthusiasts. But we said it will come with the -- thanks to the government, if you look at highways. I can tell you, if you come here on a Saturday, Sunday, there are Apache clubs, 100, 150 people traveling together. What part of the India aspiration is very. Given my moped customer when he comes in to buy moped, first he will around the Apache's region, okay? Aspiration is very high, but poor fellow, he doesn't have money. And many of times, I ask them, why do you not walk, no, no, no. I will buy this for my son, okay? But I can't afford. I will buy only this one. Same I have seen, if there is a stretch possible, they will buy the rider, 125, okay? Saying that it is a little bit aspirational. So 1 thing I have seen in India is the aspiration levels are very, very high, okay? Then we found that there are many customers who think Apache is gotten retro. They don't know. They come, they look at and raising and then say, "Oh, this is then I use. And I like the brake. I like this is modern. It is not different. It is not RE. It is completely different.

Sir, what is the monthly volume one can expect from this kind of a particular product?

I think, see, this is 1 model where it can grow. So okay. Currently, we are looking at 5,000 this month. But I want to keep the demand ahead of supply, okay? These are brands where we have to be a little bit patient, but if you ask me, India is a great country, even you get a 0.001 traction of this set of customers, it will be more than 10,000 a month.

Right, right. So I think 5,000 number is a very good set of numbers, which we are targeting. Sir, secondly, if I just look at our product portfolio like Apache, Raider, even and talk to some extent, I think last 4 or 5 months, we have seen that because of the chip shortage, there has been a significant impact. I think this is what you have been guiding even in the con call also. So what is the situation?

Apache lost quite a bit in April, May, June, and Raider also lost quite a bit in April, May, June. But thanks to our team, we were able to develop alternates. And now Raider is fully back, Apache is fully back. I don't think there will be any problem in the season now this month and next month, you will see very good numbers. These numbers can go up. That I promise you, but I'm not in a hurry. Unlike some of my competitors, I don't dump. I don't want to keep any of my dealer more than 25 days stop. In fact, I tell them, let us use the principles of OR and say, 0 loss of retail. Tell me what is the minimum stock you have to carry. And how we will you take because whether it is my working capital, dealer's working capital, it's a working capital. And from a customer point of view, yesterday, I was talking to one of my competitors is 75 days stock this year. If you keep 75 days stock, then the customer will never get a fresh product.

Correct, correct, correct. Right. Sir, what is the sense you are getting on the festive season, by the way? Do you expect that this year's festive season would be much, much better compared to last year?

I'm very confident because people are fed up. You go anywhere people are fed up about these lockdowns. And I don't think people are even testing now, rating it. Even if we were in there, people are not even testing. Unfortunately, for us, we have all vaccinated, boosters has been given, and 1 good news is even in the last, let us say, 60 days, a number of cases where we test rigorously, the COVID, none of them were hospitalize, zero hospitalization. So I think I'm pretty confident that this year's season starting end of this month to Diwali will be accelerated.

Okay. Sir, just moving to our -- if I just look at the gross margin, the kind of improvement, which we have seen or even the last 2 years, the margin trajectory has been really amazing. Just wanted to understand, is there any drop in our, let's say, import content, what used to be earlier, let's say, 4 or 5 years back versus now? If you can just help me on that line?

Import, we used to be 24%, I'm saying from my memory. Now it's around 7%.

Okay. So 24% dispose in which year or which time you're talking about?

I think it was '19, '20, if my memory is right '19, '20. They have taken a lot of including -- you will be delighted to see the biggest alloy wheel supplier in China, we brought them to set up a plant here in India.

The small correction, in 2020, I mean, he meant 2020.

Yes.

Yes. Okay. So in FY '20, it was about, let's say, 19% versus now it is at about.

24%, now it is 7.

Okay. Okay. That's great. And any scope to further reduce that in coming time?

You can reduce, but please understand we can't be without import. Certain things are not available in India certain technologies are yet to develop here. So we have to look at -- import is not a bad verdict, not a bad verdict, okay? If many of my other export people, they start looking at local content. And they say we also have to be self-sufficient. Things will not work. So I think we have to import those things, which is required. This predominantly this import reduction is from China.

Okay. Okay. Sir, if I just look at the, let's say, Q2 FY '23 is commodity prices, I think we are almost 20% down. And if I just look at our EBITDA margin, which has been in the range of, let's say, 10% we have not dropped that. How do you see that our margin benefit will probably get flow into our P&L in coming time? Do you expect that the commodity prices reduction will help us in second half or probably in FY '24?

The commodity price increase or reduction, I have always looked at it in a stable way. How do you price it? How do you price it in relation to the competition? How do you price it from the customer point of view, okay? I honestly, I'll tell you, commodity is not in our hands, okay? There may be some 3 months lag here and there between certain suppliers and this one. You get some 3 months benefit, you will also have some challenges going forward. So I think like that. But what is most important is part of the strategies we are trying to look at to improve, let us say, from 10% going forward. I think continue to create brands which can sell high volumes, okay? Continue to focus on the premium brands, okay? Premium brands like Apache, Ntorq, now we have Ronin. So can I take up Ronin into next level, systematically quarter-after-quarter how we build it. So what is most important is premium proportion is around 30%, 32% of our sales. Can it go up? Number two, exports, your colleague asked a question. Average from 100,000 can we go? And it will go. I'm ready confident that it will go. So that -- when the volume goes when -- you know about the 3-wheeler. Practically, we are many markets, we are #1. In the export market, our market share is almost close to 40%. There is still opportunity to grow our 3-wheeler. So when I -- when we look at the volume side, earlier we had many products, many we are single source. Now we are also trying to look at second source because when you expand to a second source, there is a good opportunity to look at a little bit better negotiation. And we are also now looking at seriously what our platforms can be common. What commonization we can do because the moment you do commonization, you can get again benefits. And we would have seen a lot of initiatives on the -- without reducing the value, without reducing the quality, what kind of innovation you can do on the design, okay? So I think these things will continue to focus on material costs. And equally, we always looked at an opportunity to increase prices. For example, products like Raider, products like Apache, products like Jupiter 125 or Ntorq. I told you about the varianting strategy. So there will be base model, but we will have variants where -- see, today, when a customer watch it if he's a retail finance customer. At the moment he sees the base version and he sees a updated version of the limited addition, and he will say that I have to pay another INR 100 -- and that 36 months is INR 150. He will go immediately withy that because every customer should feel that is getting a much higher value when he pays under INR 3,000. So this strategy of premiumization, focusing on very systematic cost reduction will continue. Second, you would have seen our marketing cost.

Yes, absolutely. I will just come into that.

I do think this systematically, it is possible to cut down. And all of our employee costs related today, it is full investments in electronics. We are looking at software, we are putting it extra people on the digital side. So all investments are on the EV. I see no additional people. Actually, we are trying to move many people from ICE to EV, train them, make them work on the EV side. So we are working as EV is 100%. That's why in the next 3 to 5 quarters, you will see many product launches from the company, okay? Because that is what is very, very critical at this point of time. So ICE, we know what to do, which products, what kind of interventions, which markets. That will continue. But all of us, we will invest in more and more on the EV side. I think some of you can visit, come and see the facilities then you will realize, okay? Because that is the focus that we have to do that.

Sure. Understood. Sir, just one question on this advertisement and marketing expenses. If I just look at the annual numbers. I think even in the absolute numbers also, the number has reduced. Is there anything changed -- anything we changed on the advertising and marketing expenses? Have we moved to the online advertisement? Have you done anything like that? That's the reason why we are seeing that?

Few brands, we have completely moved to digital. And that focus will be there. I'm not saying there won't be any advertisement in the TV or newspaper, okay? Don't get me wrong. But obviously, we will move more and more to the digital, number one. It's not the digitally free, okay. But as the customer requires, we will look at it. We are not afraid of investing behind the brand. Good times, bad times, we will invest behind product, we will invest behind brand because that is what is going to give next 4 quarters, next 8 quarters.

Absolutely. Absolutely. Sir, just one more question on the RM cost. I think even though if I look at our, let's say, purchases of goods from the related-party transactions, which earlier used to be about, let's say, 15%, which has now further come down to about 11%. Is there any scope to further reduce that? Can we expect that more cost benefits will help us to improve our gross profit margin?

See, I told you every supplier has invested. The traditional volume we are giving to us of players. So when you give to the new supplier. So when you give it to new supplier you will negotiate better then you put the pressure on the current suppliers saying that, look [ Foreign Language ] is giving me so much of a benefit, you also review your prices. So this has definitely itself. I will not be able to set number because I'm not so much worried about shaking up the supplier rather work with the supplier. Mission, the [indiscernible]. As a supplier as the company, we have to win. They have to win, we have to win. Dealer, distributors, they have to win, we have to win. There is a mutual win-win that relationship will be longer term. It was a win loss, it will not last.

Okay. Okay. Understood. Sir, just coming to the EV part, especially the TVS iQube, I think we have seen a very significant ramp up. I was truly amazed when I was looking at the numbers on a monthly basis. And I think you were also very positive and talking about that we might even cross, let's say, 10,000 kind of number by July?

Is there really, really looking forward to 10,000. The good news is the demand is there. And another good news is now these semiconductor companies have understood that we are any serious. So they visited us -- they have seen our ramp-up plan. They have seen our facilities, and they say, "Yes, we will help you. We will support you". So the support has started. So you will see the 10,000 soon.

Okay. So sir, what is our current capacity by the way now for the TVS iQube on a monthly basis?

Current capacity is more than 10,000.

Okay. Okay. Okay. And sir, how, when we can see the upcoming product launches on the EV side. If I just leave the TVS iQube, can we expect the more launches on the low-speed?

Yes. You will see more launches. Closer to launch, I will tell you the timing because I can't really tell you the timing, but you will see more launches in this financial year.

Okay. Okay. Okay. Understood. Sir, just one question on the EV side. I think largely, when I look at the industry scenario, I think most of the OEMs currently are now introducing products on a high-speed side, right? There is a high speed mix on the low speed side. And when I look at our probably strategy or most of the OEM strategy, currently, they are launching products on a high speed side, you take even, let's say, Bajaj to some extent or TVS to some extent, very want to capture that premium pie first. But there are certain OEMs or certain Chinese companies currently who are now present in the low speeds and their numbers are also increasing significantly. When I correlated that number with moped, I think the kind of number which we earlier used to do that, unfortunately, because of the cost of ownership as overall increased, macro factors have not been that great for the commuter segment. Are we seeing that those customers are now moving towards the low speed EVs? Why are moped sales are not increasing? If you can just throw some light. And if you can just guide us on these aspects, that will be great help. Again, the moped is amazing product. No doubt about that.

See, there are -- first, I want to answer you on the EV side. In my opinion, what is going to be sustainable from the customer point of view, forget about I'm answering from K. Nath from TVS motor, okay? Purely, purely looking at from a customer side. Today, iQube customers when I ask them why are we buying iQube, they say simply came up this like a Jupiter. This is like any good scooters from TVS. It can carry husband, wife, 2 children, some bags. So all put together, whatever I do in iQube, I will do it with interest. Number two. It can go good roads, bad roads, any time, flat time, no issue. It can take any kind of flyover of any gradation. No issue. I pass here, you asked the same question to the low speed and the medium speed of the heat assemblies, which are supplied by the customers. You ask them and you realize yourself, will it be sustainable?

No, they don't have that kind of product quality. Those products are not that durable.

And Indian customers are very, very -- they want -- the customers of moped who buy and give it to their grandson also, okay? So these customers, according to me will feel cheaper. It's a question of 1 year, 1.5 years, okay? So to me, you have to stand in for the brand and the quality and you have to focus on the customer. TVS is very, very serious about resonating the AatmaNirbhar Bharat. We design, develop, okay, everything. And we partner certain things with the suppliers. We don't have any hesitation. If you look at iQube, the motor, the controllers, the BMS system, the VCU, everything has been designed and some of them we created with the suppliers, some we do it ourselves. Why? Because this is an investment for building a business of EV for the future. We can also buy some kits from others and assemble and give it, okay? But it will not satisfy the quality standards of TVS. It will not stand in for the durability, reliability, what we are standing for. These are number one. Number two, on the customer side, if they don't get, then they will reject it soon, okay? Now coming to moped. I think let us look at last 3 years because we see sometimes the cost and effect we put based on certain things. My moped customer is using, it's a mini light commercial weight. He carries 150 kilos of load, okay? He carries the milk, he carries the -- predominantly more pets in the utility cases. It is not in the computing at. There may be few mopeds, which are used by women, teachers for convenience because Indian trust system for women, very convenient and no years like -- and big wheels so they can comparably ride a moped. Okay, I'm saying 98% is utility. The purpose of this utility is very clearly, they wanted to earn money, okay? I always say that the best of CSR activity in India is the moped. Every day, they are INR 100, INR 150, they run the family with them. But if you look at 2020 March to 24 months. They closed down everything. Practically, they have closed down everything because of the lockdown, no steady income. When there is no steady income, the bottom of the pyramid thinking is, first, I have to make sure that my family survives. The second is education of my children because I am a farmer, I am self-employed. I don't want my children to be like that, okay? Then only he starts thinking about buying a new moped or replacing my old moped, okay? Little statistic, I'll tell you not only moped because everybody looks at the moped number. Moped declined in the last 8 quarters, 38%. The best to sell in motorcycle, except of Hero, has declined in the same 50%. I hope it tells you some story. If it is because of the EV kits, et cetera, et cetera, it will not come down by 50%. So I always look at the cause and effect and look at poor fellow doesn't have money yet. Poor fellow doesn't have a job. See, this is the first year that we have seen a marriage season, April, May, June. And there is slowly now the confidence is coming. People are going up. People are getting some jobs. People are able to do some plumbing job, repair job, delivery. I think slowly, the economy is picking up. But unfortunately, what has happened is thanks to BS VI, thanks to third-party insurance, thanks to the raw materials. The prices have been going up. His salary has not gone up so much. When I meet people, I'm a firm believer that India's two-wheeler has to come back. My hypothesis is very simple. Public bank support is not there. Very good roads are there. People mobility has gone up. India is a young country, rural, 50%, self-employed 50%. The only and only solution is 2 wheeler. It has to come back to the 10% plus CAGR. Now why it is not there, 36 months or close to 14 months, we have seen BS III to BS IV changeover, GST, a smartphone is 18%. This is 28%, okay? Then we saw the safety standards, okay? All AHO. India is full of sun yet, day and night we have sun, okay? But we have adopted AHO, the safety standards and not against anything. Then BS IV to BS VI top step and jump not a third-party insurance. So if you look at in the 36 months, the prices have gone up by more than 45%. Have the income gone up by that, their saving order by that, so give some time. It will come back. Promise it will come back.

Okay. So, just to conclude on EV, earlier, you were speaking about EV, and there was one question, which was pending. I mean you said that demand is not a challenge, clearly. That's the indication you're getting. So when I look at that 6,000 to 10,000 to 20,000 or 30,000, whatever those numbers go to over next 1, 2 years. How is the distribution strategy? I mean we don't find the product present in even some of the metros. So is it more a supply chain challenge as of now because you said that there's no demand challenge. And how are you trying to resolve that supply chain challenges? Is it that the entire thing has to be done in-house? How much of value addition is happening in-house in EV side? I think that entire supply chain value addition internally? And how do you plan to scale up the distribution on EV side, basically, the presence of EV in your existing distribution, I would be interesting to get your view on that.

I think the iQube, most importantly, whatever I said, is getting the customers like the product. That's what we have done with few cities. Now we are there from 33 cities now we have 188. But are we there in all India now? Definitely not, okay? Now we are close to booking of almost 25,000 vehicles, but I don't want to take any more booking without delivery. Now from the delivery side, the semiconductor suppliers are fully supporting us. But please understand, even for semiconductor, again, let us look at what has happened in the semiconductor industry. All of you know that the auto grade, what is used in automobiles are the best grade, highest grade in terms of quality and standards and safety. During this pandemic, everybody closed down, okay, almost 3 months. Then week, 3 companies, Renesas in Japan, Renesas, they had the fire accident. TI in U.S., they had the biggest flood, okay? And 1 more company in Europe, they also had flood. These are unheard okay? So week capacity destroyed almost 60 days, 70 days. While this was happening, everybody was on Teams like us Zoom, smartphone, sitting at home, suddenly, you saw disproportionate growth in the semiconductor PC industry. Sorry, the consumer durables and smartphone and the connectivity and all this industry, okay? So today, every company is talking about 52 weeks of planning. We have planned 52 weeks back. That is why I'm getting the confidence, okay? So month after month, you will see that and you will see things improving. And one more most important thing is the logistics times have gone up substantially enough. What used to come in 30 days comes in 60 days. So due to some reason, if the max the materials are not available. And many of the flights, you can't reached because all flights are full. So many things are good to us, but many things, it also gives us a little bit of challenge. So we have to systematically now look at how do we go month after month to 10,000 and then to go to 15,000 and then go to 20,000 then to go to 25,000. That is the focus we are in.

And how much -- one part is still unanswered. How much of the valuation is happening internally in the organization? And how much of integration has happened?

See, see, many of these PCBs, et cetera, et cetera, we buy from outside. None of them are manufacturing inside. The design, for example, of the BMS system or controllers or some of the motors along with the supplier like that, we have certain things we completely design and develop. Certain things we designed, manufactured by the supplier. Certainly completely supplier parts. So in for example, in the new iQube, the VCU is completely designed by manufactured by our supplier in India. So it's a combination of make, make and buy, and completely buy. This strategy will continue even for future. But what is most important is designing. Most important is designing in-house because that is what is going to give us the biggest cutting edge for the future.

Sure. Sir, one more, I think, concern area or this is something, which I really want to understand is more on the investments, which we did on the EV side or even in subsidiary side. So can you just help me understand what were the cases behind investing in EGO AG company, Swiss-based company moved majorly into the EU bikes. Again, they are not completely a 2-wheeler motorcycle company. It's a e-bike only. What is the thought process behind investing in that company, sir?

You know our complete range and you know our EV strategy in India. Norton you know. It is really, really the premium. So when we look at -- see, with EV and Norton and some of the products that we are making in the key series, we can go to all the developed markets. So one of the thinking process was even in the developed markets, e-bikes are e-cycles are becoming very, very predominant. So there are 2 approaches. You design your own e-cycle and then start producing and then going to manufacture and look at the customers. So we thought it is best ways to look at EGO or what omnichannel and they have certain products and understand the consumer in Europe because there is a huge market and it is projected that it will get into a -- SEMG around almost 18%, 20% year after year in the e-cycle segment. So in order to save time, we felt that it is best to invest in these companies and really understand what profile, what type of customer, what kind of demography, what are the usages, okay? And at some point of time, we can look at it how do we scale up, okay, for different countries. So we can leverage other design and design capability and also look at what are things we can do from India. So at this point of time, it is completely, completely the kind of products, just ahead of the product range, what we have. And this is one thing which is likely to change in the future, e-cycles. That is the part.

Okay. Understood. So is it -- so cycle is -- it's a completely different product, what we generally manufacture but it is about the production. Is it about the distribution? Is it about the other capability, which will get it...

It is basically to understand the consumer trust in Europe because so far, we have never been in developed the market. Never. See, even the exports we are doing is almost 70, 75 markets are all developing markets, okay? Off course we have sold through BMW, the product, 100,000 globally. That is through BMW brand. So we have an understanding of what are our capabilities. But if you look at European markets where the set of customers who are buying the e-cycles, what is the profile, what is the demography, what is the usage, what is the distribution system? So the best way to go quickly into the market is to invest in these kind of companies and then understand. And please understand, SEMG is a profitable number.

Sir, just -- sorry, Bibhishan, just to continue on this. So from a longer-term perspective, the strategy is to push the cycles as a product to other developed markets and maybe even in some developing markets? Or is it that we would be looking at leveraging REV and the premium bikes? And after understanding the customers, we would like to push this into the developed markets?

Both. Both. Both Because see, 1 thing about iQube about any EV vehicles, global market, we can do, absolutely, no problem. And the K-series whatever the RR 310 and above, we can go to every market. Today, we are in the developing market, we can go to the developed markets, okay? So we will have EV products from India. We will have the highest series products, which we have partnered with BMW. We have the e-cycle. So we will have a portfolio of products, okay, which we can leverage for all the developed markets. Definitely, we can look at developed markets. And we can even look at for the developing markets as well. The e-cycles, once we understand, then we can have it even in the developed -- developing markets also. So it is a very clear understanding of how to and what kind of products and what kind of customer segments. See, please understand one thing. The bikes, what we are selling for Africa is completely different. It's not sold in India. So you need to understand the strength of TVS is we go to the market, we understand the consumer. Even in India, I don't have to explain to you. We South Indians we want dosa and idli and Italy in the morning, okay? You go to north, they want paratha and chana in the morning. And somebody in Gujarat wants to start with sweet, okay? And I have seen Apache only in black color will sell in Kerala, only red color will sell in West Bengal. So I think we have to resonate with the customer experience, customer requirement. So it is very, very important that you have the product range, understand the consumer usage then it is a very clear metric of which product, which market, what kind of strategy we can have.

So just [indiscernible], I mean just to continue, and this has been 1 of the kind of least confusing is a complex issue for us as an investor to understand. This has been a sizable commitment for learning in e-bicycles, which you don't know how it pans out. Nonetheless, I'm mostly...

I want to correct you. We may not tell you how it pans out. We know very clearly. For example, when we invested 5 years back, I have met many people in the queue, they asked me why are we investing in TVS Credit Services. Today, TVS Credit Services is one of the finest financing companies with very good returns. TVS. Many people have asked me, why are we investing in Indonesia, that do think of Japanese. Almost 99% is Japanese, where are you can are going and investing in Indonesia. Today, Indonesia is becoming successful and the years will prove that we'll become far, far successful than many of other competition. So 3-wheeler, we came last. We were the last entered into 3-wheelers. Today, our numbers, we are practically #1 in many markets, we are at 40% market share. So I'm of the view -- people generally say that you will get the first mover advantage and all. Even a first follower will have advantage, please understand. Number two, I think you invest for future. You look at the future trends, invest in that, okay? And then scale it up and be patient. The patients don't get disturbed by 1 quarter, 2 quarter, 3 quarters even if you have to take some losses, treat that as investment. So that is the approach we take, okay? Today, I can probably say that more than 16% of our portfolio, which we invested about 4, 5 years back are returning very well better than the industry. Desikan, you want to add on about TVS anything more?

Yes. No. I just want to tell you, TVSs the performance has been exemplary. We have crossed the INR 16,000 crores in the book size. We are not providing [ 4 way ] NPAs for the last 6 months continuously now. And it's doing extremely well. The collections are better than the pre-COVID today. We are -- we will cautious in deployment for quite some time now because...

That 7 years back when we started we were 100% TVS motor. Now the dependence on 3 year quarter is less than 30%.

Interest. Interesting.

We may have to wrap up in this 5 minutes, please.

Yes. There are two last questions on the same thing. This INR 1,800 -- I think about INR 1,800 crores commitment, correct, total division. That will happen over what period in these acquisitions?

INR 800 crores, where is that number? What is that number?

Division total number is INR 800 crores, right?

No, no, sir. So what I was referring to is, I think during this year, in FY '22, probably investments in our subsidiaries, we did about INR 1,400 crores, right? So how one should look at that number for the next 2 or 3 years? Which are the significant investments one can expect in the subsidies coming to?

Yes, it is a strategy driven and it is purely from looking at -- we have a very clear strategy to look at how the company has to be the next to 5 years, 10 years vision. So in that context, I promise you whatever we invest it all give returns. You look at -- you look at our consolidated also, you look at our TVS Motor or TVS SCS as you look at it. In the last 3 years, when there were a lot of headwinds and I agree that relatively, our profitability is lower than some of the competitors. But if you look at the momentum in the last 3 years when tough times were there, we are consistently performing better and better in relative terms. And you will see the performance to continue. So same way I spoke about PT TVS, I spoke about TVS SCS. I think the new investments will definitely start yielding much better results going forward. So I'm pretty confident that we are investing in the right segment as per our strategy. These numbers will depend upon the strategy and opportunities what you see. Most importantly, I believe that, for example, some of the people have asked me, why you will succeed in Ronin? I understand the customer has. I don't look at RE I look at my custom. My customer who comes into my showroom and say, Apache, I want like that, okay? Then what is the size of the market? I understand the market segmentation. I look at from the industry, oh, okay. So okay, liberate the platform and see what all things we can do. Here comes Ronin. Same way the genesis of Ntorq. So we have the design and development gate. Most importantly, if you have the design for design and development capability, coupled with the customer understanding, you can come up with delighting products. That is TVS. That is TVS. That is serious. And that is what you have seen in Ronin. And you will see Ronin becoming a well chosen brand, okay, only in India, then we can take it to other countries because we have this platform.

And sir, last question. As you said that there is a momentum in cash flows and cash flow will only go up as our profitability at everything keeps moving up. The largest allocation of capital incrementally, is it fair to assume that it will happen towards the EV part of our business?

Maximum will be EV only. Maximum will be EV only because I see we know we will, we will put some incremental investments in designing and developing some things. But we have practically most of the platform is ready. So the innovation part, we will never stop, but disproportionate investments will happen only in EV and future mobility. Let me use the word future mobility.

Thanks a lot, sir, for sparing time.

You're most welcome. Never people are available to tell us in advance. You can visit the factory spend time with us. Seeing is believing because many of the questions, many of the colleagues, whatever they ask you walk around and spend about 3, 4 hours here, okay, you will get the answer. I promise you that.

Sure. Thank you, sir. Thank you, sir.

So I think we'll do a quick amount of intros. So you have action President and CEO. So you've been the President for many years.

I moved directly to CEO. You are agreed that you're introducing in deep and this.

Is a strong objection to this on. We get the CEO. 2006, 2007? No, no to that. And he's a veteran of the group. Earlier, he was with Bapcor TVS, the Sundaram [indiscernible] is from Bapcor TVS, [indiscernible] the president of that before we joined TVS. And I think already had.

No, no, I was not president. I was at a there and [indiscernible] and I moved here and then started with the India business and then move into this role.

But even in the good sense campus.

38 years.

38 years in the group. [ I think in IIT Madras ].

Mr. Venu Srinivasan, 38 years.

And I am Ahmedabad. IIT Madras. And Mr. Desikan you are with the group from since start up.

Yes, 30-plus years, 35 years now, 34 years.

So he is a group CFO, right? So -- and with the investors, I think Kevin management -- we have Yanling, again from Singapore [ GST ], right? And David comes from [ Tarom ] UG funds. So that is first to the plan. I think all that we are coming to the plan for the first time. Then we have liquids there, who works with me in U.S. in bomber. Then on Jigar on the left-hand side from BNP Paribas, which is on the JV between BNP and Banco a comes from a have some Goldman Sachs of management, G Sachs from Mumbai. And Sandeep has been to look at a way and he's with [indiscernible] Chennai.

So yes, any quick impressions of your visit to these 2 plants? You would have definitely different many plans I promise.

He's plan is the ability to produce both ICE and EV and the same line, something special for us or next year?

Are doing it don't I don't know. But see...

The difference between ICE and this 1 is NG. Here, you have the motors and controllers and otherwise, the chassis is saying, there is more petrol tax, siding on other there is no petrol tank, we're packing the battery. So far, we have not riding the same way, but we are on the same time. So there will be some challenges. This is like the challenge when we went through when we started with BMW because every day, we make 120 country-specific variance in that line. So on to Japan, on to Canada, on to U.S. you on the latest -- so -- and each one has got specific colors and also the manual customer manual is different. So I was very much upgrade and equal to or -- because we are a company, we look at -- on a daily basis, we produce about 14,000 vehicles. And that's mass production. Here is an equal to one. So I'm very sure people ability to sort of produce in the same line EV and next year. Okay. Okay.

You look I can go now based on -- what so what an what you're explaining in terms of calling out some of.

So any questions about the plant is very keen.

Since it's a very old plant and still it's -- it doesn't look like -- it doesn't look like exactly.

I think to many Japanese plans, and it reminds me of the Japanese, the way everything is very proud went up and the way the line moves and how everything is often alive to make sure that the losses and inefficiencies I wish you the right?

One of the [ PMs ] in Indian way, our sensors have been from Japan. Was a washing some of the Union of Japanese Union of Scientists and Engineers, they have not muscle of working with sort of productive maintenance with Japanese and planned maintenance. And we also look at our production system at TVS.

In fact, as we...

If we look at all our kinds of a systems TPM systems of APM systems and the best -- the local.

Yes, go down there.

This was done like right at the start of the plan or in recent years?

It was done long, long back. But what is most important is, for example, when we went into BMW, there's [ time tips ] in my opinion are the best. And in the 2-wheelers, the best quality standards are BMW, not Japanese. I would rate the BMW [ PF ] standards are the best. So we co-create many things we've them. I can say with a lot of humility that the 100,000 bikes we have sold in all of this line, they are extremely happy. BMW team always says that your quality is equal or better than [ Berlin ].

Yes, when I saw the BMW [ portion ], it is very different from the...

With the BMW case with your management experience, would you expand to such an OEM mark with your other brands?

The BMW we're -- with the manufactured BMW...

Yes, you can do the OEM for BMW, you can do for any of them.

[ BMW, you think ] they are similar with other brands?

No because future will answer your question. But see, there was a specific interest between both the companies in [ 2012 ]. They had a good philosophy, their customer orientation, quality of condition. We also had the same thing. Fortunately, we had above 300cc an opportunity to partner. So I think is partnered with that. But one thing I can tell you, when we partnered, we started off with their -- it was their design. The entire development and the supply chain and the manufacturing and the quality, it was ours. We have agreed for another relationship, but the entire design is also ours for BMW brand. That is one clear cool EV bike.

EV bike or scooter?

EV 2-wheeler.

Okay, that's what.

Let me not use the word bike. Bike means you will think it is more [ set ]. I don't want to say the [ bomb ] but it is a 2-wheeler. It's a cool 2-wheeler, let me tell you. It will really, really surprise the market.

So you guys have done the designs, the development?

Design, development, supply chain, manufacturing, everything as far as the global -- all markets, we will have same platform for our [ whole ] TVS.

So more -- a little bit like the Maruti and -- or the Toyota.

But here it's their product. Everything is theirs.

There is no JV here. Please understand that the relationship between BMW and TVS is, we have not invested, they have not invested in TVS. It's a pure partnership of -- both companies developing common platform and using their own brand name. So [ understand ] I can -- the RR 310, they have launched the same bike as BMW brand in India. Yes.

So the Apache [ appears that it ] has been [ repackaged ] as a BMW?

Yes.

So same previous product?

So its entirely the same, just a different [ word ].

The brand alone is BMW.

That's it. Everything else is TVS. So TVS, I believe they are saying that this design is BMW -- they use it for BMW?

[ Nothing like that. They like -- they are from BMW. ]

And the color scheme will be different, BMW color scheme and higher price.

How does the economics work for you? Is it a...

It's not economics. I think you have to look at from the confidence of the BMW brand. If somebody has to put the BMW brand on your product, you should be feeling proud that they are recognizing the quality equal to them. No such company will lend their brand to you.

So the relationship is actually people right [ courses for their varying ] use for them overseas, then is this cool EV [indiscernible] and now they say [indiscernible] and can you [indiscernible] are people...

They can -- we can market -- the EV market...

Let's say, will consumers know that [ AHO or HP hand is ] BMW is actually just...

Consumers must be knowing.

Just getting the customers [indiscernible]

And the price difference must be...

Price difference is there. Their brand is worth the premium. [ And largely, ] most important -- more than the price difference, I think if a brand like BMW can say that I want to use your product to put my brand there, that is not easy. It's not easy. I don't think in the history there will be many such cases as ours.

Newspaper, I saw an interview about the views they spend 80% of time to do the [ electricity ] each wheeler than...

We should be careful now.

I know a little bit of how to use when 80%, and what is the...

Like I said, our management I think this company knows [ IS ] very well. And there are enough people who are trained on products and technology and training, supply chain. If you had asked me the same question about 5 years back about having the relationship with BMW, I would have said no. But today, thanks to BMW also. Now we know that even the developed markets, our engineers know what to design, what to develop, how to deliver, how to deliver appearance, quality in any aspects. Now EV, really all of us need to learn. It is learning and developing and putting into the market. So it's a combination. It's not only for me, the entire top management team of the company, understanding EV, EV technology. And we believe once you are serious, you have to design yourself. Not source a few parts and assemble and give it to the customer. That is not good [ in this conversation ]. So -- when I said 80%, significant proportion of my time, okay, goes only on that. For example, we have now a dedicated team of more than 150 people in the digital side. 2 years back, it was not there. So even when viewing the understanding and there is a lot of investment until you get somewhere. They will teach you many things which you don't know yet.

Digital systems, what software or what is it?

Every aspect of digitization. How things are going to be looking differently in the future. Same way in the software itself, yes. Same way the electronic side. Same way -- who knows, motors, controllers, the news series of -- see, we know very well on the chassis side, on the basic of our scooters we know. But the entire EV cells, cell technology, BMS, every aspect has a huge learning.

How big is the R&D function for EV and in totality? Because there will be a lot of shared services also, right, between EV and...

I think more important is not size. I think is the right area you need to address it. So far, we have not disproportionately invested in digital or in software or in electronics in a big way. I'm not saying that we don't have people. But this is disproportionate investment. Because this is going to make -- our belief is that this is going to be a smartphone on wheels. Future is going to be smartphone on wheels. People also use it for mobility or commuting.

As the Tesla is wheels on a computer -- not on computer on wheels. So do you agree and are we going to have a fully computerized and digitized and the buy the computer to the very depth of the whole system?

See the only biggest difference I see is -- we always invest in the core technology. That may be the reason our R&D costs are higher. Yes. Our product costs are higher. Our depreciation [ exists ]. In earlier times, people ask me when compared with competition, why your depreciation interests are higher? Why your marketing cost are higher? You have too many brands. We look at customer segment and we differentiate. I -- when you travel, platinum customers are platinum customers. Economy customers are economy customers. Business class customers are business class customers. If you compare them, I don't think people will be happy. They may not be unhappy. They won't come back here. And many brands are always, I don't work for this quarter, I promise you. This company, there's brands that will be there for 50 years, 500 years, that is what you need to decide. And then say these are the investments we are going to make. We're so much focused on -- I'm not against profit, don't get me wrong. But will I be aspiring to become 20% EBITDA. I also want 20% EBITDA, but not at the cost of investing in R&D, capability, brand. Those areas if we have to invest, we will invest.

So if you had to [ put off this topic in your investor meeting ] led by priority, what would that be?

Our priority is fully equally in EV stuff.

And within the EV, how -- what will be the priority?

All products. All products. All the areas. I told you the core is wherever the customer differentiation has to happen, we have to invest.

Which would be the [ investment ]?

I cannot be able to share, but ultimately -- I can give you an analysis. You look at Jupiter, [ there is a ] 110. Even in Jupiter 110, you have a [ second ] collection, you have a classic version, you have a Grande version, okay? Now we have a ZX Jupiter. Then we have a 125 Jupiter. And when you go to 125 Jupiter, you are seeing the complete design. It has got 2 helmets. It has got a front fuel filling. It has got an entire gasoline tank is in the bottom -- complete with -- it is not just to make the engine alone to 125, which many other people do. That is not addition to the consumer. Every time you have to give disproportionate value to the customer. And then NTORQ. NTORQ is a completely new version of engine. It uses the best power. It is for young people, young men and women. And it has got even [ Wi-Fi ]. I can only give you analogy today. All this will be seen in the EV space.

So software clearly stands out for you. Connectivity, software- backed?

Let me tell you...

As a software-oriented product, you have a difficulty to acquire adequate engineer to do that. I think the most traditional industry guys has a difficult to alert technician to join them, right? Like Volkswagen [indiscernible]

Have you seen any of our voice connected or connected clusters or have you have tried any of our...

We didn't get the time, to be honest. And okay, in order to answer this question. Those are in-house or it's -- in-house developed by you guys, right? In-house. So what will be the strength of our software team across everything you have laid out?

Okay. If I say 1,000 people, is it going to solve the problem?

No, no, no.

I think -- please understand, you need to have -- we firmly believe that you need to have a -- I will give you again analogy. If you need technology, it's not that the number of people who will give you technology. You need to know where you will get the technology. How are you going to get the technology? What are the core competence you need to build in-house? 30 years back we partnered with best-in-class universities globally. We put our students there. They did their PhD there. This IQ was developed 10 years back, not today.

That was a plug-in hybrid or something like that?

We started somewhere the journey, okay? And our -- we sent something like 40 engineers every year to best-in-class universities globally. So this is quite a lot of investment in people, learning technologies -- the IQ or whatever I said, [ I can do this here ]. Every day we train about 600 people on various subjects, including quality, TPM, TQM, basics, to EV advanced future mobility. There are best-in-class processes globally, there are best in class consultants globally. We don't mind investing in developing people.

Is there technology transfer between you and BMW on the EV front? Or they are also behind...

This is not technology transfer. I think you learn from each other.

The core product is yours, [ the in-house... ]

It's completely designed by our team. So they look at our capability. We look at their capability. So there is always, when people sit together, this is a mutual learning. You tried this testing? No. This is a EV test. Okay. This is way it is done in Munich. This is the way it is done in Europe. These are the things which we will have to look up. Then somebody will say, no, this is the way we do in Rajasthan. Rajasthan has [ one rain ] 50, 60 degrees. It is even hotter than Gulf countries when it is summer. Oh, we have not even heard of that kind of temperature, okay? So this is the type of test [ site ]. So there is always, I believe that in any relationship has got mutual learning. There's nothing about technology transfer in one way, win-win for us. And you know, if there is flow in one direction, it will never win. The flow has to be together, otherwise why should I spend time and tell you these are things I don't know, nobody will tell you. They expect something from you. These things I can learn from you. Brilliant. And I can also teach you what I have.

Which EV player would you look at to learn, to pick up learnings from?

I don't -- honestly, we don't look at any EV player. We look at the customer. Because when you look at the customer, for example, we find that customer usages are different. Customer test sizes are different. Customer changing behaviors are different. Usages are different. Then you have some challenges, for example, suppose you see somebody like when you -- again analogy. When we went to African -- some of the African market, we go to rural. We find that people are using other grades of fuel, they are using kerosene, they are using something else. I can't say that, that is not the correct thing to be used. That is not the fuel to use. Their [ test ] levels are different. I can't tell that my bike will work only in this, this condition. Then customers will reject you. So you say, look, I can understand, how to make your bikes work in those conditions, bring those oil, bring those things, put the [ test ], see what kind of filtration you need to have. So to me, everything is customer. Customer usage. [ Temporary though I said ] you know. You don't see anybody talking about 50 degree and 60 degree [ heat ]. The moment somebody said, oh, Rajasthan is like that. We have never heard about Rajasthan. We know only gulf countries which goes. It is in India. So you ride there during peak summer. Then you realize, oh, amazing. And the stand also during that [Foreign Language], what you call the sandstorm in the peak summer, you get it. Oh, you get [indiscernible] But you go to these people, they will tell you minus 10, minus 15, which many people will say. Yes, I understand minus 15 is okay. No problem. But more and more, more and more higher temperature than [ any you got ]. So there is some mutual learning. I seek to say this is even with the suppliers also. You go to a good supplier, other to see that distance or somebody. They will not just take whatever you say as not needed. They will say hold on, hold on. They will say -- they will have a structure questions on the customer usage, and say, okay this is your requirement, we will come back to you. So I always see the standard co-creation. I use the word co-creation.

Do you think it is necessary to have some manufacturing in-house?

Definitely you need to have manufacturing in-house. [indiscernible] same manufacturer. So maybe it's too early. The reason is -- the industry is changing. We started off with 650 and now it is 21700.

You started with 80s, that's much more expensive, complicated, right?

In the 80s it was 650, we started, and that was what life was like [ that was available ] By the time we started with them, now the next few series has come down, now next series will come. So there is -- manufacturers have got their own interchange, density, cost, volume, the NMC, electric, various combinations, applications, cylindrical. so the variability is so huge and each one has got best application. So I don't think this is the right time to decide. In my opinion, designing a 2-wheeler or designing a 3-wheeler, which is liked by the customer is our priority. And work with those competent, outstanding quality suppliers at this point of time. That's why I said, definitely it will be every bike. But that bike has got a very detailed [ decision making ] and standards and quality and safety and every then you say, okay, we will partner with them and we'll buy from them, whatever. And they will do the business. And we have to be aware that these are the things which are likely to change.

The BMS [ is standing out right now because ]

BMS is ours, because it has got an influence on the customer, the performance, the characteristics of the bike. So when I say bike, don't get me bike, okay, 2-wheeler. We're quite often use the word bike. Bike means this is not motorcycle.

So BMS technologies, we have developed in-house or we have partnered with someone?

In-house, in-house.

And what other critical components we are running?

Controllers, BTLs.

So we are planning to do that in-house?

We have already done it.

VC is also the power controlling unit.

Integrated [ BCU ], including the display, TFTs. Whatever you see in [ ICE ] -- iQube is all designed and developed by us, okay?

So motor? You didn't mention motor.

Motor, we partnered with some of the suppliers, designed, co-created, because our requirements on the motor or delivery of [ systems ] [indiscernible] so we co-created that. Motor is one area maybe we will decide which type of motor maybe we have to buy, which motor we have to make. Those discussions will come. That's why I said, all this will get evolved in the next 3 quarters, 4 quarters, 5 quarters, 6 quarters. So you will see a big, big change.

And different applications may need different economics.

And also requires -- you have maximum time to [ talk to ] management, because we don't know honestly which type of motor we have to decide. Then somebody will say what amount of -- in case of [ this motor ] isn't available because of geopolitical reasons, should we make that kind of a motor, okay? Somebody has got [ abrasion ], okay? So you need to get involved. So that's why EV is learning, complete learning, a new learning.

How much of the supply chain is already available within India, such that we can see the industry...

I think India -- one thing I will tell you, my experience in the last 2, 3 years looks splendid. I think there are some suppliers who are really, really able to think out of the box. I will give you 2, 3 examples. You saw [indiscernible] that cluster, the TFT cluster, there are big companies like Bosch [ and com ] globally. So we are discussing with them. One, always look at the high-end. Their priority goes there. They get good prices and a lot of development costs they get. So every time they will say that, yes, we will give you this very important -- and time is going and going and going. But in my view, if you look at Apache RR type of a customer, he says why can't you give me a TFT cluster? I am willing to pay. So premium customers, they are ready. They're not looking at the money there. They want the features, they want the technology. If we supply, they will completely -- but they need supplier. Our design, he made it available to us.

But that's also amazingly why Indian customer want so many functions, even their budget might be limited. Let's consider the 2-wheeler buyer mostly not that rich or they are cost sensitive. Like I've been told by the user of Maruti, the success of Maruti because of the design of the car, we keep the maintenance low -- maintenance costs are low, fixable and blah, blah, blah, all undue costs. But right now, like from yesterday to today and where our team have visited many different players in this area. All of them told us we are aiming a little bit higher and with more function, not less.

Let me ask you, why everybody buys smartphones? Apple -- what is the series 14, 15 point -- I always get them confused, because every time there is a new series. One, it's a fancy. It's -- they have a [ V4 bandwidth ] 15 smartphone. You have launch here.

iPhone and attrition rate in my company is above 95%.

Global situation, not only in India. Everyone thought that the pandemic is going to create more problem. But every company, in my understanding, had done extremely well. Whoever has been giving good premium. We discussed about issues at the entry level, more bread and cost segments. You go to my market, my dealers definitely have a budget. My dealer doesn't have [indiscernible] My dealer doesn't have high-end of any [ auto ] products. Rich people are rich. And India population, okay? Even 1% is a huge margin. Okay. This is not only for 2-wheelers, even for cars.

Okay, [ let's -- my theory is... ]

So Maruti one of the phenomenal [indiscernible] 20 years back. Maruti is not the aberration. Hyundai. Okay, recently, I'll give you one example. I have 2 daughters. I asked one what car want? Kia, Seltos. Indians' aspirations. A moped customer walks into a showroom. Again, he will first go to -- he walked around, he will see that. He will go to only buy a moped. And you ask him, you are anyway interested in moped. I don't know I am looking. At some point of time I can buy it to my son or my daughter. That is why everybody wants to invest in India. Aspiration, aspiration. Very young country. Take you in the weekend, go to any highway, you will be amazed, people having big end bikes, big end scooters, all premium products, class. Everybody will riding. From India you go any flight, business class will be always full. There will be seats in the economy class. I can take the answer. I always tell the people look India is the biggest. Consumer is like this. The aspirations levels are like that.

Even that's right, for the 2-wheeler, if am this side, I don't want the 2-wheelers. So if only people on this side want 2-wheelers...

Which side?

The poorer side.

The poorer side. Poorer side, they will look at something like Jupiter or they will look at something like a Scooty or they will look at entry level motorcycle or moped. They may say that, look, I don't have -- I have only so much which money. I call them budget customers. So they will say, look, because they are completely, completely driven by the economy, agriculture, the income what they get. So this is very, very important that we cannot forget about them. But the young country, young people, aspirationally high, okay? For example, when I look at now the NTORQ plus the Apache plus Jupiter 125 plus Raider, I say there is more than 40%. And [indiscernible] is one that is going out. They want the latest. They want [ Raiders ] This is like [indiscernible]. Why are people forcing this, I am not trying and forcing them. I'm -- we have a concept called build to order, N equal to 1. So we [indiscernible]. So my team presented to me in Keral, we will have 50 per month capacity. I said don't even start, you will have problem. So customers, I said minimum 200 to 250. Now I booked it for 3 months, 250.

250, and what's the price?

Per month. I think it will go to Maruti price.

INR 3.5 lakhs to INR 4 lakhs.

Since he knows Maruti, I am telling him...

INR 300,000 to INR 400,000.

He wants to really, really showoff to his friends these features.

Just like a secretary always has the best item.

Yes.

This is something.

So I think the reason why I spoke about India's aspiration is, India has got huge opportunity. And India, unfortunately, doesn't have good public transport. But our investments in the roads. But if you look at last 36 months or 40 months, we had BS III to BS IV, then we have GST. This GST is 18%. And moped GST is 28%. He will tell you more details. This is 18%. That is 28%, okay? Then we have AHO. All time headlights on. You see in India, full of sun, okay? But somebody benchmark EURO. Then safety standards, TVS 125cc and above. You're driving in our city, how many people are able to travel 100 kilometers, 125 kilometers, correct? Then we have BS VI. BS IV to BS VI. Then our insurance people says no third-party insurance should be 5 years. So in the last 3 years, the price of the products have gone up by 40%. But during this period, we have almost 24 months of lockdown. No income for the 50% of the self-employed in the rural. That is what we are going through. But I'm pretty confident that give some time, this evaluation system will be good. And give some time, give some time because these consumers are very aspirational. They want to buy the buy because they don't -- they need mobility needs. Half which them, they are either plumber, carpenter, electrician. They go home to home. They repair, they get the money. They supply something, they deliver some parts. That is the job.

So could you confirm something because I guess what his point is that if you want to target the aspirational segment under which segment they will be buying below high end. So if you look at the people who are buying 2-wheeler, it's people who can't [ wear ] affordability...

I said no. I said no. People use 4-wheeler, majority of the people. I'm not talking about the high-end BMW 7 series. I'm not talking about them. I'm talking about the common man. People like him. He will be using a car. But he will also use a 2-wheeler, yes. His wife also will use a 2-wheeler. One of the questions I was asked when Nano was going to be launched. What will happen to the 2-wheeler? I said if Nano is successful 2-wheeler it will double-digit because customers -- those set of customers will buy a car to use it for the weekend with the family. But regular guys they will use only a 2-wheeler. India's total cost of ownership and some major investment in their life. This car is a major investment in their life. So they will keep it for very, very important, say with the family.

So basically you're saying is that even that segment where they can afford to use the car, they will still buy a 2-wheeler...

Have you visited Indonesia? When we went initially, I was shocked. Indonesia people have small houses, maybe 1/3 of this size houses. Men use, women use. And you know what they do because I stayed with them to understand. They keep the -- we barely understood the scooter inside their house and lock it and they will sleep outside. No, truly. Please listen. Especially people from Singapore and [ Diamond ], please visit. Whenever they are giving it for service -- India is actually better. They will be sitting near the mechanic and looking at the bike. Apply a leave to his job that day, half a day. Because in his life, this is the most precious thing, not even his wife. And he or she tells that this is the most important investment in their life. It cannot be stolen. And already mechanic cannot remove any parts, I want to see what they are doing. India may not be so much attachment to the 2-wheeler. But some rural, it's so much attached. They give so much importance for a 2-wheeler in their life. It's a very, very important investment in somebody's life.

So majority people, either you buy a 2-wheeler, they still want to go 2-wheeler in style, something you're precious or proud of.

Repeat.

Once who want to buy a 2-wheeler, they want a one which is stylish or have more features.

Something new. Something -- for example, moped, there was a discussion inside the company should we give the EFI technology or we can use the [ FADA ] technology. EFI technology use best in class fuel efficiency and total cost of ownership. And this was the bike where we you guys be first. Because it gives a lot of consumer convenience, fuel efficiency. But this gets very small money, so we said to a moped customer we should improve his productivity. No kicking, no kick-start, only i-Touch start. So that his knee problems. So we looked at what the pain points of the customer, what's the total cost of ownership, and then we decided that the technology to be used in moped. I'm taking moped as an example. So many a times, please don't only focus on the premium customer, who is willing to pay. Look at every customer and say what is it that he's valuing and give that to him.

You mentioned EVs that you mentioned lot of is happening on [indiscernible] by decision. In terms of markets, so in the next 3 to 5 years, will India be the main marketer in Southeast Asia?

We can reference these products, for example, the same can be sold both in all export markets and even developments. But today the constraint is, any market you enter, you have to fulfill the volume. So I don't see -- we started with Bangalore, and we expanded -- we went to 33 cities. Now we are in 88. Already booking is more than 25,000. I don't want to book because still booking, everybody will be a gentleman. The moment you take some money from him, then he will say, no, I booked. Why are you delaying me. While every semiconductor company is trying to improve, it is still not up to the level what we want. We want immediately 10,000 to be delivered. 2, 3 months or 10,000 or 15,000, then we may enter into 1 or 2 markets. But you are right, absolutely right, this is a great opportunity. We may have to have certain modifications on certain parts based on the [ load ]. I won't say that the same -- predominantly the same platform will be used in Indian markets.

In any of these markets, you are seeing some adoption -- I mean, Southeast Asia and Europe?

I think there are -- for example, every market is going through the journey what India is going through. Every market is talking about EVs. For example, Indonesia, I know some people are also testing [indiscernible] our dealerships are there, but I don't have today the capacity -- not capacity, delivery capability. But it will happen, it will happen.

On the [ security needs ] how do you think about the viability and -- because there's a lot of companies are losing a lot of money in EVs, especially the startups. So how you look at it as a philosophy? And as EV ramps up...

To me it is similar to marketing to TVS credit services or in PT TVS. In TVS, when we invested about 8, 9 years back, we have to come up with a completely new set of products, [ neo pumps, decks ] I'm not going to say just in India.

[ Scooter the rest ]

[ Scooter ] candidates. So we design, develop, we have a full-time team. In Indonesia, we have a plant there. May not be so big, but smaller-sized plant. That means there's a paint shop. So there are basic things we don't compromise on quality. Customer is important for us. So we treat it as an investment, and we had some challenges because 98% Japanese and almost 95% is retail finance. And the retail finance terms are dependent on the volume, whether it is the initial -- the EMI, interest, exactly like India. So we have some challenges, but we stayed back. The good news is we stayed back and said, customers like our product, but there are challenges. No competition is going to be easy, allow us to succeed, but today they are profitable. Now we are able to see the multiplayer effect. More and more people [ seek for ] our brands, more and more countries want it. So same thing will happen here also. But the good news is from negative market, we're on the positive on the cost.

Below material.

I think we'll have to see. Like I said, customer wants to access, the demand is assured, then the topline is assured. And the topline comes, dealers are happy, some dealers are happy. Suppliers are happy. Everybody wants to participate. Now volume we'll see the luxury of looking at the total cost.

Let's talk about EV...

Now I'm talking about EV.

EV below [ better ] than breaking even.

No, no, it is positive.

And of course, the subsidy benefits are included in that...

Subsidy is not a bad word here. When India started exporting, every country had thoughts on support from the government. We started up with 14% in the export benefit, today is 1.5%

How much, 1.5%.

Yes.

And your exports are since very profitable.

Yes. So there is a learning curve. In any business, there is a learning curve. In the learning curve, you focus on the customer, you focus on the quality, never make shortcuts. I have on most days some numbers. That is not my intention. You have to be sustainable looking at quarter-after-quarter and build brand, brand, brand. Come with a lot of products, put the right infrastructure, partner with companies, for example. In the EV space, we have partnership with Tata. We have now Jio. And we have to look at more about the future people who are going to -- we don't know which is going to be. As of now, customers are using home charging. Fast charging is possible now along with the new iQube. Most importantly, you keep yourself -- my view focused on the customer, customer usage and agile, and see how things are changing.

Do you think absolute EBITDA per unit for EV would be higher than for ICE in the long term, like...

I look at -- these are investments for future. This question is like left eye is important or right is important. For me both eyes are important.

Just from the standpoint like when you described an EV as the smartphone on wheels, we were to long-term margin or [indiscernible]

Learning curve. Learning curve. I can also counterargue saying that today I don't export to many of the developed countries. Developed markets, you get better prices for the same product. And I can make more margin. But I'm not in the margin game. I'm not in a margin game. Margin will come here. Focus on the customer, focus on the technology, giving the best to the customers. Top line will come, and the top line is where every [indiscernible]

It's not a kind of...

You are asking ICE versus EV.

Correct. Correct. But that would mean...

So will be the 2-stroke to 4-stroke, now to EV, tomorrow somebody will come up with hydrogen, somebody will come up with new technology. I think it will be valuation. And we should not prepare which technology is going to give you more and more profit. Nobody knows. Okay? But you must focus on the volume because this is the business that is driven by volume. Costs are dependent on the volume.

How much is localization in EVs right now? And what kind of percentage localization you are looking by then?

As of now, everybody are looking at getting from the coming most of them, but all of them know there are many companies [ that have interest ] in India. Possibly may take -- it may take 3 years, 4 years. So maybe you'll start with import initially on [ sales ]. Then start [indiscernible] about it. That's why I could sell. Many people who are working on the semiconductor side over the time, take time, semiconductor side. So it is going to be started with like importing. But over a period of maybe 3 years, 4 years, many things will be completely in India. But the in-house investments to succeed or Indian investment are volume driven. Volume is customers have to accept your product. That's why it comes back to customer acceptance. The customer acceptance is there, here technology will not work.

So investment in terms of EV is like you were mentioning that...

Continue, continue.

No. So I'm saying that big change like this, which is happening in terms of the entire industry getting, let's say, getting a churn as such, how do you think about customer education, where you say, they want to buy whatever is going to be sold to them, right?

What car you got?

Sorry?

What car do you use?

I have a Honda Vue.

Have you seen the manual?

No.

I can tell you if I have hundred of my iQube customer, how many of them have read? And you can't use just 1, 3 incident of one tech guys' [ conference site ].

[indiscernible]

And they will ask, "Who is in charge." So please understand, customer is not so complicated.

No, no, so he is not [indiscernible]

I am answering you. They have a purpose. When you brought the car or when they brought the car, let me tell you, I have a -- what is that Kia Carnival, okay. I just took a test drive and on the EQV, electric very good. I tried Honda. I asked them to tell me which are switches, that's all. After that convenience, ride, that's all. Consumers' mind is not so complicated. In my view, customers are completely agnostic about the technology. It's in the boardroom [indiscernible] discussions like, what does the customer think? No customer think. How many times we have read the manual of this. Honestly, I will tell you, as a person, I don't know what technologies are there, what features are there. This is customer behavior. So many a times, there may be a set of customers who are very techy. That is how we deal with separately. For example, if we are dealing with [ other items ] et cetera, et cetera. I have seen my dealers complaints are about a problem.

The customer doesn't know.

Customer don't know. So in order to look at which are the model, which are the customers who are fluent in the technology and the features, actually we will deal separately. Their proportion is very small, very, very small. The other day I asked 100 iQube customers -- I was shocked. Nobody said I use this, I use that. They said it is brilliant. I charge it at home. And I feel very happy. This is noiseless. The terminology what they use is, no noise. Very convenient. Very smooth. And I can take my entire family like my Jupiter. That's all.

The question was that whoever reaches the customer first is going to be able to sell it to him, right? And if the customer is not discerning enough to kind of know the difference between, let's say, something brought from China versus something developed in India, which is so...

There, I agree with you. That's why you are seeing the low speed and the other speed is moving very fast now. The moment you will start -- I think you can tell in the numbers what some of my competition highlighted. Why is it not selling? Why -- go to their online [ website ] they will give you so many numbers. I normally I don't talk about partnerships. Not easy. Customers know if there is a problem, they would email me. Early morning if you have a 2-wheeler, getting up between 6 o'clock to 6:15, I may even [ say this indiscretely ] because I know my 2-wheeler is there. And you go there and start, it doesn't start. One day, nothing. Second day, nothing. Third day, what will your dilemma? They will be completely get upset. So we have to look at the customer completely. A 2-wheeler customer, he wants flexibility of his mobility. Whenever I go, I should be able to go from place A to place B. So down plan. If you ask my XLS customer in Nigeria, I use 200 kilometers everyday. Universal behavior. Why is this the behavior of the Nigerians? He doesn't want even 10 minutes break. I have never seen people riding 200 kilometers, 12 to 13 hours every day. Because that is the money they have. So literally about the customer segment, we need to understand, we need to deliver that quality. Even Chinese would succeed here. I'm not saying -- I'm not I'm not against anybody. Anybody can reach a customer. Two important things I said, this is the most important investment in this customer's life. Most important. So if I put INR 60,000, INR 70,000, INR 80,000, it is my earning of the life. That thing doesn't start or doesn't work whatever I want, I will get p***** off, completely p***** off. And as you know, the bad word of the mouth travels much faster than the good word of mouth. Nobody will say I have a [ full ] life, nobody will say. But if I -- client interest, if I have some problem, I'll tell my friend, "Hey, don't buy this tech." But if I have a good ride, I won't say please buy it. Let's put this [ main wire antics ] for all of you. They have tried and they have many things. So if you're a variety South Indian, North Indian, or only vegetarian. He will give you only vegetarian there.

Sir, in this increasing dealership, are we looking at new dealers as well? Or are we giving more old TVS guys licenses?

It is not old or new dealers. How do I evaluate performance is based on -- on one side, we look at the service there. On one side I look at the sales care and how they treat the customer. So we have a comprehensive score. And those dealers who are very pro customer-friendly, such dealers we will continue. And here, honestly, I don't know how it is going to pan out the distribution. Mainly there are a set of customers who completely believes in online. But [ I hate conferences ] unlike a TV or a PC or consumer durable, this is a moving vehicle. And moving vehicle will have wear and tear. So it requires some kind of a service. But there is no engine. So in my view, it could be a hybrid structure. This is the early stage. I can't really, really tell you how it is going to look. And many things are going to be OTA, with so much of software and whatever you can do in this can be done in the 2-wheelers. So it's -- at this point of time make structure possible? Maybe there will be some difference in urban and rural and semi-urban, okay? So a lot of learning curve will come.

And so when you look at all this, because you have [ talented ] output part because you shared a lot of the input and all the process,[ by your outreach ]

I shared with the profitability and it will be awesome. Be patient. Have you seen 2020 this year?

[indiscernible] I think buzzword

India plays with India A India played 50 overs. [indiscernible] India this test match. 50 days, 50 overs, now it is 20 overs because people are becoming restless. They don't want to spend the whole day. Have [indiscernible] okay. Good bowling. Fast bowling. Very difficult pitch. I always tell the people be calm and stable. Respect good ball. If you stay calm, you will get an opportunity to hit your 6s. So stay calm. To me, it is nothing different to our TVS Credit Services or [ PBT ].

[ Call ] is different, process is same.

Process is same.

Even the top lines to the customer...

Focus on the customer.

With scale...

What is scale, it will come. Prices will come down.

Which customer segment do you think you are less welcome to the [indiscernible] you want to focus on [indiscernible]

ICE, I would really want -- we were not there in 125cc in Raider, will come up now. We were not having 125cc, we have come now. So if you ask me, we were never there. So we have to match between [ siding the ] customer segment, our capability and then decide what kind of product. But this is one area we continuously work on. And possibly in the EV side, if we start with scooters, but my hypothesis that is scooter as a category is around 35% now. It will expand. 35% will become 40%, 45% and 50% like that in the total 2-wheeler industry.

These are all [indiscernible]

So [indiscernible]

[indiscernible] service. Of course, we're already there.

[ Go and buy a TVS Hero ]

Customer.

You decide the customer, okay. Don't go by -- don't get influenced by -- you ask the people whoever has brought today iQube. Easy, you can do a focus group and ask what did you consider? Then there is [ advancement with ] the scooters or somebody will say, I use motorcycle.

And your [indiscernible] how do you see the price point of that [indiscernible]

Price point we will see. India is a country [indiscernible] One hypothesis I have is premiumization is going to happen.

Premium recession.

Premiumization, okay? People want more and more features, more and more technology, especially today's young people. After I saw the Kia, I was expecting some...

Maruti.

Not Maruti and all, it is a car for old people. Today's young people look at Hyundai. They look at Kia. Because they have affordability, aspiration levels have gone up. Then they will put their budget. So I will what is that Venue or something?

Hyundai Venue.

I'll just know she will be happy. [indiscernible] we were

Small car.

I said 1%. My friends are saying, and I want only this, this, this features. So today's young people especially in urban, their aspiration is somewhere.

And that saying that you live only once.

I think some of things the current generation of India, I agree with you. Please understand when we were growing up, we were always looking at saving. Saving for the next generation, apartments. Invest in an apartment because -- now I go to Indonesia, I talk to the union people, Saturday, Sunday they don't want to work. They used to say, we want to have friends. We want to meet my friends. To me it was not [ with me ] because we work, work, work. This is nothing called life, life, life.

[indiscernible] 10% on the like you said in Indonesia, they are kind of lazy. They just awaken and [indiscernible] happy. And that India is hardworking and willing to work.

I don't know about lazy. I think lazy is a [ negative ] term. For example...

[indiscernible] I miss that, some bankers have come. So I have a physical meeting, so you may have to excuse me now.

Anything you want to say, sir?

[indiscernible] I think [indiscernible]

I think he used to come to TVS...

Give us a brief picture give us credit as long as any update, the last call was great but how is business checking.

Yes, sure. TVS Credit Services is a subsidiary to TVS Motor Company. TVS Motor Company holds close to 85% -- 85%, 86% in TVS Credit Service. As far as the book size is concerned, they have recently crossed INR 16,000 crores of book size, very profitable, very healthy book. There are no provisions formed in nonperforming assets for the last 4 or 5 months continuously. The directions are better than the pre-COVID level today. In fact, earlier TVS Credit Services used to depend on 100% business from TVS Motor Company when it was started. Now the dependency is as low as 30%. We are doing for other business, including consumer durables, trucks, used tractors, cars, everything today. We have close to more than 10,000 people on ground for collection, though the collection cost is slightly high, but it is really helping us on the collections, there are no provisions today. That's the news. And we are quite cautious in deployment. Otherwise, we would have even crossed INR 17,000 crores by now. That's the reason. But otherwise, it's really doing very well.

And so plans [indiscernible] -- you did talk about plans to bring an actual investor for TVS Credit?

Yes, we are exploring all options. There will be a fundraise program. Probably we'll let you know very soon. We are evaluating all options.

Probably most important is -- let me start with -- 100% TVS Motor dependent. Today, their dependence has come down to 30%. 70% [ lesser ground ] Any business is like that. We started with 1 version of iQube. Now we have 3 versions at 3 different price points. Understand. Now we will have more and more products, more and more segments.

So how many products you planned in the across -- not even in this -- but how many over the next, say, 18 months?

You will have every segment, ultimately, you will have product, and it will be not only for Indian market, for global market. You should eat that. It is all made for you.

Can I take leave, please? Thanks you so much. Thank you, Pramod. Thank you team. Thank you so much.

Thank you, sir.

In iQube, if you can talk a bit about the recent [ divested ] investment as to how that ties up into your previous overall [indiscernible]

I don't want this place [indiscernible], but I can say that -- there is a logic. See, we have the EV plus ICE. And this is an offer which is very, very high end. That we all [indiscernible] e-cycles. If we look at, we don't know anything about Europe market, but there's a great opportunity to enter into the Europe market. And these cycles are growing almost 20% CAGR in this market. So there is something invested in people, movement and the CMG primarily to understand customer, customer usage, channel, okay? Options are different. You can also design, develop something and then put it and then it can learn. But these are all strategic calls. We look at which is the fastest to understand consumer or consumer behavior. And it is possible to scale it up. But this is an addition to the range, okay? So I think we will constantly look at the opportunities for right investments and scale it up. And then try to look at how will we make it profitable.

I think I can understand that when you are accumulating so many slow investments over a long period of time, one plus one and plus -- it certainly becomes 20% of your book something, that's the risk that you let it go...

See, let me start it and finish now. It was completely completed [indiscernible] Forget completely, even with Indonesians.

Indonesians, yes.

To me, money is not the problem. HR is the problem. When you make so many businesses, who will run it?

That is the worry they have, [indiscernible]

I answer. I used to go to Indonesia every month. Last 3 years I have not gone. I compare and say now that I have not gone, it is profitable. And it is run by the Indonesians. So I have a dream. We will have Indonesians. We will have Europeans. We will have Africans. We will have Latin Americans which will be running this company with the core TVS days.

What was your the major difference between having a factory in the Indonesia versus here? [indiscernible] there are so many OEMs doing like textile, apparel in the Indian, that is not in India, in Indonesia, but not in India. As a like if you are in United States, you can see a lot of T-shirt made in Bangladesh or Indonesia or even Pakistan, but rarely in India. But supposedly India should be a country with cheap labor, even cheaper than them. But the majority of the global brand, not using India as the OEM center. That always a puzzle to me. [Audio Gap]