New number plates mean a lucrative business

The government, with one stroke, has ended up generating Rs 1,500-crore business for the next two years.

By year-end, consumers in every state of the country will buy a new vehicle that will don a specially made high-tech security registration plate. By 2014, it is expected that all vehicles in the country, including old vehicles, will be made to join the bandwagon. The plates will be tamper-proof, secured by a snap lock, virtually impossible to duplicate by roadside vendors, with a unique identity number printed by a laser technique. They promise to provide vehicle-owners with security against theft or misuse by terrorists.

All this translates into an attractive business, with competition between half a dozen active players getting fierce. Players such as Rosmerta, Real Mazon, Celex, Schimnit and Promukh Hoffman, run by small businessmen, are gearing up for a kill.

Huge potential
A 100 million vehicles run on Indian roads and need to be fitted with new number plates, translating into a Rs 1,500 crore business in the next two years. With 18-20 million new vehicles being registered every year across the country, the annual business potential is Rs 300 crore. U R Kapoor, deputy director (operations) in Rosmerta Technologies, which is implementing the registration plate’s project in five states including Delhi is upbeat about the potential in number plates.

“We are targeting at least 30 per cent market share of the Indian business. With a margin of Rs 5 per plate it could be an interesting business. Also the numbers of players bidding have also reduced now,” said Kapoor.

The fierce competition between the players has affected price. The price that consumers have to pay for the plates has dropped like ninepins from as high as Rs 1,800 just two years ago to below Rs 150.

Sandeep Aggarwal managing director of Celex Technologies which has won the contract for giving the registration plates in West Bengal, feels margins in the business are low. “The margin in the business has become low. And competition is fierce. As a result some players are working on negative margins”, said Aggarwal.

The attempt to modernise number plates started in 2001 when the central government came out with a notification that all vehicles have to shift to the new security registration plates in a year. The implementation got delayed due to a plethora of court cases. The Supreme Court resolved the various contentious issues and is monitoring its implementation across the country.

Seven states have already awarded number plate contracts. From January, seven more states gave contracts to private players to implement the new secured registration plates. Joining the bandwagon now, some key states — Andhra Pradesh, Uttar Pradesh, Maharashtra and Karnataka, which constitute a large percentage of the vehicle population — have or are in the process of floating requests for proposals from private companies to implement the project.

Security features
The new registration plate are meant for added security. In Delhi, which launched the project last week, the aluminum plates will reflect light and carry a hologram issued by the state government hot-plated into the sheet.

The registration number will be embossed by special machines and a hot foil will be rolled over the number with IND written on it in blue at a 45 degree angle. A laser number will be inserted on the plate by the manufacturer which will be unique to the registration plate and whose records will be there with the company. The plate will not be fitted by screws but by a snap lock. For four wheelers, a sticker will be embossed on wind screen with the engine nd chassis numbers for extra protection.

Plate companies need to invest about Rs 3-4 crore to manufacture the blank plates of different sizes and as much as Rs 20 lakh for a single embossing machine whose numbers will increase based on volumes.

Key challenges faced by companies, says Kapoor of Rosemerta, are import of aluminum from Germany and Italy as Indian manufacturers don’t produce the specified quality, which increases costs.

Some states, for instance Gujarat, are asking for a share of Rs 20 for each registration plate. In Delhi, the state government takes a loyalty fee of two per cent on each registration and has imposed a fine of Rs 20 per day if the registration plate is not delivered to the customer in six days.

The backlog of old cars is another challenge. Rosmerta, which plans to start implementation of the new plates for existing vehicles from June 15, is in talks with the Delhi government on whether it should be done in phases based on the oldest vehicles first or based on the serial number of vehicles.