The country’s leading sports utility vehicle producer, Mahindra & Mahindra Ltd, announced today that it has bought a controlling stake of 55.2 per cent in the city based Reva Electric Car company with immediate effect. Mahindras would infuse Rs 45 crore in the company.
Consequently, the company will now be renamed as Mahindra Reva Electric Vehicle Company or Mahindra Reva.
Post the buyout the board of Mahindra Reva has been reconstituted under the chairmanship of Mr Pawan Goenka, president, automotive and farm equipment sectors, Mahindra and Mahindra. Mr Goenka told reporters here today that the new board would now include five nominees of Mahindra and Mahindra, two from the Maini family and one from AEV LLC, California, co-founders of Reva. Mr Chetan Maini would continue to play a leading role in Mahindra Reva as chief, technology and strategy while remaining on the board.
While refusing to divulge details of the transaction between the two companies, Mr Goenka said that the current capacity of Reva, the battery operated car, was around 6,000. Another 30,000 was set to be added at its new unit in the city. The overall sales of Reva vehicles stood at 3,500 at present.
This was expected to go up substantially as Mahindra and Mahindra would use their wide distribution network in India and abroad to promote the eco-friendly vehicle.
Additionally, he said that post buyout, the possibility of reducing the price of Reva vehicles substantially could not be ruled out because Mahindra and Mahindra would be able to leverage its vehicle development expertise for the purpose. This would make the components cheaper.
The deal is expected to give Mahindra access to the much needed technology as it wants to be ready when the demand for the eco-friendly vehicles goes up in the immediate future, considering the growing awareness for environment friendly cars.
That the investment in Reva is part of a long-term strategy was evident when Mr Goenka said that within the next few years, he expected the domestic market to touch 80,000 to 1,00,000 vehicles. By 2020, he said there could be over 1.5 million to two million Reva vehicles on the road across the globe.
As he explained, it was a strategic acquisition for Mahindra and Mahindra and Reva brought the company complementary strengths.With Mahindra’s global distribution network, sourcing clout and financing support, Reva would have the potential to gain in market penetration.
Equally important, Mahindra would benefit from Reva's electric vehicle technology for its own products.
Mr Chetan Maini, chief, technology and strategy, and founder of Reva car, on his part, said that the electric vehicle market was poised to grow significantly. The founders, therefore, had concluded that to seize the opportunity, they needed the resources and experience of a major automotive manufacturer.
In Mahindra, he said, the founders got a company that shared their vision. Following Mahindra’s investment, Mahindra Reva would now be able to scale, innovate and accelerate to deliver more products to customers, he said.
No comments:
Post a Comment