Beleaguered Scooters India Eyes A Car Ride

Perennially sick Scooters India (SIL) has staged a turnaround, thanks to the BIFR package. It has chalked out plans to manufacture a scooter car. The company's accumulated losses as on March 31, 1995 stood at Rs 563.68 crore.

The company expects to return to the black in fiscal 1996-97. Arun Sahai, chairman-cum-managing director said the way the company had been shaping up in the last three years were instrumental for the optimistic projections.

The company increased its turnover to Rs 85 crore in 1995-96 from Rs 9.87 crore five years ago. It is expected to end the current fiscal with a turnover of Rs 120 crore. About 16,000 units of the three-wheeler Vikram, its only product, is also expected to be manufactured in the current year .

 

The main reasons for the company's turnaround has been the voluntary exit by about 1,200 workers two years ago, reducing total employee strength to 2,000. Also its product has been well received and has captured a sizeable portion of the market in Maharashtra, Karnataka, Haryana, Punjab and Delhi besides Uttar Pradesh. The company has also been able to increase production regularly .

The BIFR package envisages the following:

A further reduction in workforce to 1,676 with a two-year moratorium on increase in wages.

A capital expenditure of Rs 11 crore for augmenting and increasing installed capacity to 24,000 units, spread over 1996-97 and 1997-98, will be invested by the Union government.

The central government has written off interest of Rs 450.09 crore on a term loan of Rs 166.72 crore. Rs 27.22 crore will be converted into equity and the rest will be written off.

A one-time settlement of dues of the three FIs and the UPSIDC amounting to Rs 16.15 crore on a principal of Rs 3.14 crore and a interest of Rs 6.09 crore. Payment of the principal amount and half the interest is to be made immediately by the Union government. The government will make available Rs 6.20 crore on this head and Rs 5.25 crore for the VRS of 345 employees.

The scheme envisages the company would earn a marginal profit from 1996-97 itself, and the net worth would become positive in 1999. Regarding the vehicle, Sahai said the firm had zeroed in on France's Ligier car. The car is available in two versions and runs on both diesel and petrol.

The response to the cars, which were displayed at the Delhi and the Pune auto shows, has been encouraging. The estimated price of the two and the four-seater is Rs 90,000 and Rs 1.25 lakh respectively, inclusive of excise.

SIL plans to bring out its car by the end of the year.