Reva car is the latest sensation in the four-wheeler market. The electric/battery operated 2-seater car is a logical extension for the Bangalore-based Maini group.
The group, which has been manufacturing electrically operated material handling equipments for several years, recently decided to leverage that strength. It struck upon the idea of an electric car. Reva, its newest offering, has many of its components identical to that used the material handling machines it manufactures.
And that is one of the reasons for Reva Electric Car Company to enlist component vendors easily even though the company offers low volumes.
And it signals a new beginning for the Maini group consisting of clutch of companies employing around 1,400 people. The group has its genesis in Maini Precision Products, which manufactures high precision lapping tools for Mico, a leading automobile ancillary company. Over the years the group expanded its area of operations to include automotive components, machined castings and forging, manual/battery operated in-plant material handling equipment and granites, tiles and slabs for domestic and export markets.
Planning to invest around 7 per cent of the turnover in research and development activities the Maini group hopes to sell the electric car with minimum media spend. Says Sudarshan Maini, group chairman and the founder, "We mostly depend on public relations and use minimal advertising."
Given this position, the Mainis certainly have to shore up their media relations. Even long distance calls to contact the promoters made by this correspondent got routinely transferred to the company's unresponsive marketing department.
Finally, after persistent efforts Mr. Maini answered an e-mail questionnaire. Excerpts.
domain-b.com:Can you elaborate on the Reva car project
Sudarshan K Maini (SKM): The Reva Electric Car Company, earlier known as Maini Amerigon was incorporated in 1995 as a joint venture between the Maini group and Amerigon Electric Vehicle Technologies, USA to manufacture environment friendly cost-effective electric vehicles for city mobility.
Amerigon Electric, which is a research and development company specialising in bringing aerospace technology to automobile sector, holds 35 per cent of the companys equity. The total project cost till date has been Rs. 60 crore.
domain-b.com: What prompted the Maini group to get into the electric car segment?
SKM: It is the passion for the environment and turning Bangalore into a pollution free city. Further the groups material movements division, which manufactured electrically operated material handling equipments, offered us the obvious choice to venture into the electric car industry rather than the conventional car market. It is a car that is made for India to suit Indian conditions using material available in India.
domain-b.com: What is the total capacity of the Reva car plant and the estimated market size for such cars?
SKM: Our production for the first year is 1,500 units and for the second year it will be doubled. By year 2003 production will be scaled up to 12,000 units per annum. We will be breaking even selling 3,000 units.
Anybody and everybody who needs city mobility and cost effective travel modes and those who believe in a pollution free concept of travel are our market segment. Till date we have sold 100 units. We have also received enquiries from countries like UK, Japan,
Norway, Mauritius, Nepal, Bahamas, Sri Lanka etc.
domain-b.com: What are your component localisation plans? What kind of vendor assistance do you provide and the problems you faced in developing a vendor base due to the small volumes you offer?
SKM: Out of the 1,100 components in Reva car, 99 per cent of the components will be manufactured in India from the start of production. Value wise this is approximately 75 per cent of the car value. By the end of the second year the company aims to achieve indegenisation close to 100 per cent.
Our vendor assistance is mostly technical in nature. Further Maini group is in the business of manufacturing automotive components for the last 28 years and has exported more than 90 per cent of its turnover to original equipment manufacturers (OEM) in advanced countries, to companies such as General Motors. The group has QS Certification and has been winning awards from ACMA, and EEPC. Maini Materials have been manufacturing electrically operated material handling equipments.
domain-b.com: What are the costs of maintaining the Reva car?
SKM: The cost of running the car is forty paise per km as compared to Rs. 2.50 of the other smaller cars in the market. In addition, the car is relatively maintenance free (approximately 40 per cent lesser than most other vehicles).
domain-b.com: What is the distribution network to be like?
SKM: At the moment we have only one company-owned showroom in Bangalore. We plan to add on many more in leading cities in the future.
domain-b.com: Leading automobile company, Mahindra & Mahindra, is already road-testing its electric vehicle, Bijlee. So what about the competition?
SKM: We are in a totally different market segment with the Reva being marketed as a personal `city' car.