TVS Motors continued to shape its future mobility proposition this week, purchasing a 48.2 percent share in DriveX, a pre owned two wheeled platform that operates on a subscription model.
What is DriveX
DriveX is part of a thriving online business model that operates across India. Launched in 2020, it offers an all inclusive style option on used bikes. You choose a bike from a rolling stock of a couple of thousand bikes, have your details processed and approved in a day and then wait for your warranted bike to be delivered to your door. This used approved option is available on a subscription basis for up to 36 months at a time.
DriveX was founded by Narain Karthikeyan, a 45 year old racing driver and businessman, he was the first Indian driver to compete in F1, driving for the Jordan team. The 48.2 percent stakeholding that TVS purchased for just shy of ten million pounds, coupled with other TVS related shareholdings takes their stake in the business to 51%, Narain retains around 40% of DriveX
How big is the market?
Ginormous, actually. Nearly seven thousand used bikes a month are purchased across India alone. I’m joking, it’s two million. Yes, two million used bikes a month. That’s an annual used bike market of 24 million and growing and, due to the proliferation of online sales platforms, the market is moving faster than it ever has. Considered to be largely uncontrolled at the minute, it’s clear to see the opportunity that TVS Motors Managing Director Sudarshan Venu wants a part of:
The pre owned two wheeler market is largely unorganised today. It’s delightful to see what DriveX has been able to create and deliver in a short time. Narain and his time have built a unique platform that can scale up quickly. DriveX has a vision to bring a change in this segment by building trust, assurance and transparency through end to end high quality products and customer experience through innovative solutions. We are confident of DriveX ability to deliver on this vision.
According to the SIAM (Society of Indian Automotive Manufacturers) 17,417,616 two wheelers sold in India in the period 2019-2020. Despite this number being mind boggling to me, it actually represents a dip of approximately 17%, this is potentially COVID related, but what’s as interesting as the domestic dip in India, is that Exports of Indian two wheelers marginally increased in the same period.
Why does this matter?
We’ve written before about how TVS is shaping a business model for Europe and I think this is a key part of that strategy. If purchasing e bike sales and distribution networks in the DACH region of Europe (the largest market for electric pedal power in Europe) was a smooth move, shoring up a business in DriveX that would enable TVS to roll out an approved used option behind the sales of new bikes is inspired. I get the feeling it wont be long before TVS announces that they’re selling TVS motorcycles in Europe and beyond. When they do they’ll already have the bones of a business established in some of the regions they want to expand into.
Could they offer a DriveX style option on used Nortons?
Well it’s possible. Obviously before we can have used Nortons, we need more new Nortons so this isn’t going to happen overnight. If you step back and think about the bigger picture though, the timeline is logical. I expect we’ll see new Norton models coming online over the next 3-5 years, as production volumes increase, the opportunity to provide approved used bikes similar to how Ducati does makes complete sense. I think what’s more important here is seeing how the foundations of TVS Motors selling their smaller capacity two and three wheelers to a global rather than domestic market is shaping up.
Words: John Hogan