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Reva gearing up for exports drive in Europe

Fakir Chand in Bangalore

Reva, India's first electric small car, which made a dramatic entry a year ago into an already crowded automobile market, is gearing up to enter the exports market with all-new looks and additional features.

Having made a modest beginning with about 200 cars on the India roads during the first year of its operations in 2001-02, Reva Electric Car Ltd of the Bangalore-based Maini group is entering into marketing tie-ups with international dealers in Europe and some Asian countries to export the noiseless, zero-emission small car, beginning from next month.

Maini Group chairman Sudarshan Maini told rediff.com in Bangalore on Thursday that Reva cars would be shipped to Italy, Sweden, Norway, Germany, and the UK during the current fiscal year 2002-03, apart from some neighboring countries in the South Asian region.

"We have already started exporting the state-of-the-art Reva to Nepal and the response has been encouraging with orders for more units. As the second largest electric car producer the world over besides Ford in the US, Reva has the first-move advantage in the emerging trend for zero-pollution cars," Maini stated at a preview of Reva Classe, the new export model with additional features for maximum comfort and safety.

Betting on its price advantage over similar electric cars in the international market, where there is a growing awareness and demand for such eco-friendly passenger cars, Reva plans to sell its flagship product at $6,000 per unit, which will be one-third cheaper than the existing ones.

"We are upbeat on exporting about 200 cars during this fiscal to fetch an export revenue of $1.2 million, and constituting 20 percent of our total sales. Though we are yet to launch our road shows abroad for demo and personal test drives, the initial response has been through our website (www.revaindia.com) and personal enquiries from visiting delegations," Maini affirmed.

Cashing in on the strict emission norms in the European countries, where legislative amendments and regulations are being made to check the menace of gasoline and diesel-powered vehicles for pollution-free environment, the company is set to introduce enhanced and customised versions to meet the demands of the emerging exports markets.

In this context, Maini quoted the recent British government's proposal to ban the sale of conventional automobiles in order to encourage the development of electric and fuel cell-powered vehicles.

The high-ranking British scientific advisor David King has called for a ban on the sale of gasoline and diesel-powered cars in the UK on the lines of a similar ban being imposed by the Lombardy region of Italy, which has decided to stop sale of fossil fuel-powered cars from 2005.

According to a statement issued by King, the UK is keen on implementing the Lombardy-type order to usher in 'green' cars at the earliest and protect the cities from the dangers of auto fuel pollution.

There is also a move to impose 5 per cent entry tax on all gasoline vehicles in London from 2003 onwards.

Though King did not specify as to when the ban should come into force in the UK, he lamented that the British government's policy on innovation had failed to properly address the potential threat of climate change. His proposal is aimed at curbing the fallout of greenhouse gas emissions as existing fossil fuel-based vehicles contribute 25 percent of Britain's annual carbon dioxide emissions.

In the run-up to meet its export as well as the growing domestic market demand, the Rs 600-million group company is stepping up its production at its Bommasandra facility on the outskirts of the city to roll out about 250-300 cars per day from this year-end.

As an equity-cum-technical joint venture with AEVT Inc., a leading US-based automobile design company, the Maini group had invested about Rs 600 million in the design and development of Reva prototype over the last five years.

AEVT has a 33 per cent stake in the group's company, with the balance 67 per cent being held by the Maini family.

Ever since Reva hit the Indian roads over the year, the concept of an electric car has been catching up fast even in a conservative country like India, where there is a need for a change in the mind set.

While the conventional passenger cars of all types and models have invaded the domestic market over the last decade, the volumes have brought in their own attendant ills leading to pollution, congestion, traffic jams, etc in all metros and towns across the country.

"With growing concern for the ever-increasing pollution levels and their fallout on the health of the city dwellers, the discerning have been able to see reason in going for a Reva that costs less than an entry-level conventional car at Rs 250,000 and gives a mileage of just 40 paise per km or 9 units of power for 80 km," according to managing director Chetan Maini.

After its recent launch in Delhi and the northern market, the company is on an overdrive to target smaller cities and towns across the country for pushing its sales during this fiscal year by a record five fold.

Dedicated and authorized dealers are being appointed in Jodhpur and Jaipur in Rajasthan, Ahmedabad and Surat in Gujarat, Hubli and Belgaum in Karnataka. More are on anvil in other 10 states.

"We are targeting delivery of about 1,000-1,200 cars this year, including an export of 200 units to Europe and countries like Sri Lanka, Nepal, and Bangladesh in the sub-continent," Maini claimed, adding that the sales were projected to double during the next fiscal (2003-04).

The Mainis, however, are sore with the Indian government for back-tracking on the 50 per cent subsidy the electric car was granted during the fiscal year 1997-98, but not extended when it finally rolled out last year in spite of a strong recommendation to the Union finance ministry by the environment ministry.

"Even the excise duty has not been reverted to the earlier 8 per cent slab from the existing 16 per cent. While CNG vehicles are given 5 per cent exemption on the import its components, no such benefits have been extended to Reva despite strong representation," Maini lamented.

Though the electric car has been localized up to 90 percent, the company still imports 10 percent of critical components from the US and Europe at a whopping cumulative tariff of around 45 per cent, including counter-veiling duty, adding up to its total production cost and sale price.

In contrast, Maini said many western countries were going out of the way to promote electric cars, which are pollution-free and noise-free. "In some countries, electric vehicles are exempted from motor tax, while in others, insurance is lower. Power supply to charge them are also at reduced rates. Governments in the west are encouraging people to use such cars as taxis or on rental basis," he added.

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