Tata Motors' Nano, the world's cheapest car that costs slightly more than some premium bikes available in the country, is unlikely to wean away buyers from the two-wheeler segment, an industry official said on Friday.
"I don't ascribe to the idea that the introduction of low priced cars in the market will affect the two-wheeler segment," S Balasubramanian, executive vice-president for operations & marketing, TVS, Srichakra Ltd said.
"As of now only five per cent of population in the country has a vehicle," he said on the sidelines of a company function to launch three tyres for two-wheelers. The potential market of those using cycle and motorcycle was still "very large".
"A potential customer of a cycle can not go an buy a car," he said, adding any new economic car's entry in t
he market was a welcome step.
Tata Motors showcased Nano last week. The car will be sold at a dealer price of Rs 1 lakh. This is comparable to some premium bikes that cost as much as Rs 80,000. Noting that the two-wheeler segment was growing "enormously", he said the number of vehicles sold in 2006-07 was 85 lakh and it is likely to touch 86 lakh this fiscal.
"In each month at least seven lakh two-wheelers are sold in the country," he said, adding last year showed a growth rate of 38 per cent in the two-wheeler segment. TVS Srichakra is a major supplier of tyres to TVS Motors, Hero Honda, Bajaj Auto and Yamaha.
It is aiming at a revenue of Rs 540 crore (Rs 5.4 billion) this fiscal from Rs 468 crore (Rs 4.68 billion) last fiscal. Exports contribute around 16 per cent to total sales.