By : RACHNA TYAGI
In conversation with Nagesh Basavanhalli, Group CEO & MD, Greaves Cotton Ltd., who talks to us about being encouraged by Tamil Nadu's latest industrial policy, Ampere Electric's plans of manufacturing two wheelers for the affordable mobility bracket and their new manufacturing facility.
TOS: Tamil Nadu has attracted a lot of investments in the EV space of late. Why has the state become such an attractive destination?
NB: Let me set a context to our journey. Over the last four years, Greaves has moved from a single-product, single-customer focus in diesel automotive to a solutions and services player in last-mile mobility where we mobilize people and move millions of people. We saw this emerging trend four years ago and were one of the early movers in electric mobility partly because we had seen that unit economics in two-wheelers and three-wheelers works for us. It has worked in China for the two-wheeler model. Greaves then made a couple of acquisitions and due to these, we have facilities in Tamil Nadu at Coimbatore and in Ranipet.
We have been very encouraged by Tamil Nadu’s latest industrial policy. Based on industry feedback and the fact that their people have been working with our teams very closely, it has been very positive. In this context, I would say that for us, it was more of re-committing to Tamil Nadu than going into this state
We operate in the belly of the market. We are in the affordable mobility bracket with products priced between INR 35,000-90,000, and under INR 100,000.
TOS: What kind of vehicles are you planning to introduce in the coming months?
NB: We operate in the belly of the market. We are in the affordable mobility bracket with products priced between INR 35,000-90,000, and under INR 100,000. What we also felt in terms of driving sustainable mobility was the unit economics, which is significantly in our favour, once you overcome the price of the battery, but it was also that we are looking not just at ICE customers but also first-time buyers, millennials, Gen Z, college students, housewives and retired folk.
For the millennials and the Gen Zs, we wanted them to see the technology and leverage this and for a lot of them, post-covid, sustainability has become a priority. With high fuel prices, EVs are a practical option. We wanted to keep our costs low, efficiencies high, have a supply chain [in place] so that we can produce to a particular scale.
As a group, Greaves, has access to an automotive ecosystem. We have a start-up in Ampere, and combined with a legacy company that can give guidance or some of the ecosystem advantages, our core strategy has always been about how we mobilize India, how we improve productivity, and what I mean by productivity is if somebody was taking two hours to get to work, now, takes 20-30 minutes. For the younger folks, it is freedom, convenience, comfort and for housewives, it is the freedom, not having to wait for public transportation. We have 75,000 customers so far and growing and we will continue to listen to the voice of the customer.
TOS: You're very clear about the space that you will be operating in, but do you feel any pressure at all from competitors?
NB: The market in the two-wheeler EV space is nascent, yet fast growing. Two-wheeler mobility when you look at it are more than 20 million units when you count IC engines in India and at some point in time, it is quite natural that these will transition over a period of time to cleaner fuels. Even if we take 2025 as a milestone, which Mckinsey and other consultants have pointed out, roughly, 25-30% will get converted to electric. That’s a sizeable number. We are talking about 5+ million potential customers.
The market size will be big enough for everybody. We’re a No 2 player today, roughly 20+% market share, when you count both high speed and low speed or total vehicles built. At the end of the day, we need to continue doing what we do best, which is affordable mobility, understand the customer, give him the kind of product he or she wants and continue to bring new technology. For example, you may notice that if you go on an incline or on a ramp on an elevated highway, at some point of time, the vehicle has a tendency to go back, so what we have done is incorporated a Hill Descent feature; if somebody is worried about range, and about getting home in the last 10 kms left, we have a feature called Renew where you can ask for extra 10% juice out of the battery.
What our customer segments are looking for, it could be affordable but it is also not cheap. We are clear in terms of technology, design, aesthetics, styling, product attributes and in terms of the customer needs that it needs to satisfy. This is where we are going to operate first to get a good positioning, more in the B2C space, but also keep in mind that we also cater to B2B space.
TOS: Tell us about what is happening at Ampere Electric in terms of design?
NB: If you look at our core automotive team, the chairman of Ampere is Mr. BVR Subbu, a veteran. We also have veterans having recently taken on a 20-year Yamaha veteran, Roy Kurian. So we have a formidable team that understands automotive design and comes with Chrysler lineage. Automotive design is crucial to what our product needs to give to the end-customer. While we have an R&D center in Bangalore, we have a small team of designers too. Our innovation center is the one that we continue to keep building and the innovation center has a couple of young design talent from Indian institutes. From time to time, we also collaborate with people outside but right now we have a few smart designers and we’ll continue to build a top-class innovation team.
TOS: Where is the team based out of?
NB: We have announced our intention to go to Ranipet with a mega plant. Then we have an R&D center at Coimbatore, and an innovation and R&D center at Bangalore. So it will be a combination of Bangalore and Coimbatore. Greaves also has R&D centers in Pune and Aurangabad. So, from time to time, we leverage the two because they have the physical infrastructure in terms of testing labs. The Ampere core R&D is Bangalore and Coimbatore.
TOS: Do tell us about the new facility?
NB: Our facility will be a combination of automation and productivity. Also, we will be prudent in our approach. We will hire workers from the local areas. We are looking to start by end of 2021. Supply issues are a constraint but we are going all out to get the new factory up and running by the end of this year.