In an upfront interaction, Nagesh Basavanhalli, Managing Director and Chief Executive Officer, Greaves Cotton Ltd. spoke about the company’s plan for its e-mobility business
Interview by: Deven Lad
Q. How much does the emobility business contribute to the overall revenue? Did you anticipate the kind of growth you’ve registered with this new business?
A. As seen from the last annual report, new mobility businesses are now contributing to more than 15 percent of our revenue. As you are aware, we are in the affordable mobility space offering uninterrupted journeys. I think in terms of growth, it will come from the electric two-wheeler and erickshaw segment backed by allied segments. We’ve reported a 21 per cent market share in the new mobility business attributed to Ampere Electric. We believe at the Rs.35,000-80,000 price bracket, we are well poised catering to the heart of the market.
Q. Your major clients in the EV space and any 100 percent key clients ?
A. We do have OE clients like Big basket of Innovative Retail Concepts Private Ltd., the bikesharing startup Bounce and we continue to add more.
Q. You’ve been a strong player in the three-wheeler combustion engines. Are you confident of replicating that success with the BAPL acquisition?
A. Greaves has been a strong player in the affordable, last-mile mobility segment. When you look at the 70 per cent market share in the engine, three-wheeler and the passenger-cargo segment it compounds to be the entire segment in India. Together with Ampere in the two-wheeler space and Bestway Agencies Pvt. Ltd. (BAPL) opening new fronts in the electric three-wheeler segment we stand a good chance of being one of the organised players who can cater to affordable last-mile mobility and offer the entire ecosystem. It all adds up with building products for the duty cycle, service, spares and finance.
Q. Has the Covid pandemic dampened your outlook on the emobility segment?
A. We definitely look at it as a short term impact on the sentiments. In the longer-term, we believe, the sector will revive driven by the end consumer’s preferences for personal mobility. For some of our vehicles, retail has gone up by 60 per cent. The same trend is extending to B2B customers like Big basket and other e-commerce players looking to add to their last-mile delivery fleet. We are definitely in it for the long haul and are looking at Covid as a near term disruption.
Q. What measures are you taking to ensure sustainable growth and return on investment for the parent company and subsidiaries?
A. We’re closely watching both the demand side and supply side and taking all the measures to sustain a business like cashflow management, manufacturing and supply chain stabilisation, working capital management, cost management, enhancing supply chain flexibility, accelerating channel expansion and customer acquisition besides reimagining partnerships and alliance among other strategic initiatives pertaining to not just the near but the long term.
Q. You have also diversified into battery manufacturing. Tell us about the localisation levels and any technical JVs to leverage the entire lifecycle?
A. We’ve said this as part of the localisation commitment to the Government of India. This exercise was on pre-Covid and we are only further accelerating the drive. The China dependent supply chain will be substituted with in-house initiatives and or with our strategic partners. We will not foray into the battery cells. Our focus will remain on battery management systems, motors, and controllers to name a few.
Q. How are you tackling the supply chain bottlenecks with the backdrop of Chinese import congestion?
A. China scaled up volume efficiencies because of economies of scale. So I think what we’re trying to do is accelerate our own localisation drive. Over a period of a time, we believe that we will be able to manage this short term hitch. We’re all still dependent on China because a lot of the supply chain origins there.
Q. How have learnings from your prototype E3 been leveraged? Any commercial derivatives of it for the near to medium term?
A. It has derived a lot of positive consumer responses. Now, as you can imagine, we have our hands full with the product strategy plans to launch three products under Ampere, and commercialise Best Agency’s rickshaw. We will come back on it when we are ready.
Q. To sum up on e-mobility, what are the growth and challenge areas in the near to medium term?
A. We just launched the Ampere Magnus Pro, a high speed, top of the line product with a lot of technology left to be launched on the Ampere side. So we will continue to develop more consumer features, thanks to our 60,000 plus customer pool nurtured over the last 12 years. So you can continue to expect retail outlets and dealership chains to expand. There is a need to heighten awareness but we are growing every quarter. With economies of scale that should be taken care of in due course of time.
Q. A word on the emobility sectoral growth on the whole?
A. I expect the electric two-wheeler segment to grow. We expect the growth momentum seen in the past to continue. It will be driven by price falls and the delta between petrol and diesel in the country. The economy continues to stay strong and with more and more people getting comfortable with the range anxiety clocking on an average 70 kilometres on a single charge.
Q. You had demonstrated the new dealership and workshop experience some years back. How much of that has been implemented on the ground and does it need alterations in line with the contactless approach?
A. That’s a good point. All of our dealers including Ampere have taken all the precautions. We are looking at the product and service training, virtual meets and a standardised experience that needs to be passed on at the end of the day. We believe, our dealers are ready. Like I said, we want to use picture tools to guide them several initiatives have been taken in terms of adopting the best practices for the inside and outside of the company. We will continue to support them on high priority.
Q. Has digitisation and organisation become a top priority for your aftermarket presence in a sector still largely unorganised?
A. I think clearly like you said the sentiments will take a couple of months to probably improve, but it is getting better. We have seen an improvement in June. But yes, until then absolutely, digitisation of communication and making sure that we are watching everybody’s safety will be on top of the list. We are conducting business in the most responsible manner.
