Reva to rope in franchises for production abroad

Electric car manufacturer Reva is planning manufacturing facilities abroad under a franchise model to penetrate those markets. These units will be built under licensing agreements with local partners, wherein the brand name and technology will be owned by Reva.

The company, whose head office is here, has sold about 3,400 electric cars so far. It says the licencing agreements will cover not just four-wheelers, but also auto-rickshaws, mini-buses and two-wheelers.

“We are looking at licence manufacturing opportunities to set up plants in different parts of the world. We are evaluating with several countries and several companies, but it is a little premature. But I would definitely say that in the next six months, we would be able to make our first announcement in that area,” Chetan Maini, Chief Technology Officer and Deputy Chairman of Reva Electric Car Company (RECC) told Business Standard.

He said the plan to open overseas manufacturing facilities was conceptualised long before, but the company was seeing much revival of interest over this concept in recent days, as many companies and local governments are showing interest at this model. The company is primarily looking at the US, European and Asian countries.

Reva will also have an investment partner in those plants, other than owning the brand name and technology. The local partners will have the sales rights, because of their understanding of the local markets.

About half the 600-800 electric cars produced by RECC each year are being exported to countries like the UK, Norway, Spain, France, Germany and Costa Rica. The company has sold about 1,000 electric vehicles in London alone, a key market for the company globally, as many as it has sold in Bangalore.

It is also erecting a new manufacturing plant close to its existing one in this city, with an investment of Rs 30 crore. Expected to be operational by early next year, the plant is capable of producing 30,000 electric vehicles yearly.

Maini said the company had signed up with 24 countries where the company is either selling products or doing a test-launch. “With new product launches expected to happen early next year, we will have a presence in several countries in Europe and South America and South East Asia.”

Asked if there was any plan to go into the electric two-wheeler market, Maini said though the focus was going to be the four-wheeler segment, the same technology could also be test-integrated to two-wheelers. However, he added, “we think the two-wheeler market is less technology-oriented, where the brand and the distribution capability hold the key. It requires a lot of investment, whereas the margins are quite low. It’s not a business model that we are looking at”.

Last month, Reva agreed to provide GM its technology for developing an electric version of GM’s Chevrolet Spark. Maini said, “We chose GM for the small car market, but we are looking at our relationship in a much bigger way. It does not preclude us from addressing segments like three-wheelers or mini-bus.”