By IANS
Ahmedabad : The electric vehicle division of steel and engineering firm Electrotherm India Ltd, whose electric motorcycles sought to revolutionise the Indian automotive market, is currently having a bumpy ride.
Financial performance of the auto division of the company for fiscal 2007-08 indicates that it has been continuously sliding.
A top official of the company however told IANS that the new division would drive high on growth in the next two years.
Yobikes, as the company dubs its electric motorcycles, are produced at the company’s plant in Kutch, about 400 km from Ahmedabad. Electrotherm started a new division called Indus Electrans to implement the electric vehicle project.
The company has seen a slide in sales of the electric bikes. In April-Dec 2007, the electric vehicle division could generate only Rs.368.6 million compared to Rs.517.7 million in the same period the previous year, posting a drop of nearly 29 percent.
At this rate, it could be difficult for the company to get anywhere close Rs.689.3 million revenue it generated between April 2006 and March 2007.
This is also reflected in the steep fall in revenue generation during the third quarter ended December 2007. During this period, revenue generation was just Rs.150.7 million compared to Rs.287.79 million in the same period in 2006.
Nayan Nakra, director of finance and projects, acknowledged that the electric vehicle had not registered any growth.
He attributed it to the “late approval from Automobile Research Association of India (ARAI) for our new model with 750-watt power because of which we could not catch the peak season demand of October-November.
“We also had difficulty in sourcing good quality motors and batteries.”
However, he said: “With our captive motor and battery unit going on stream by next month, this bottleneck will be removed in the next financial year.”
The company lacked a paint shop, resulting in difficulty in obtaining pre-painted steel and plastic components, Nakra said.
“We have now commissioned the most modern paint shop for both steel and plastic items, which will remove this bottleneck also. Regarding plastic components, we have now provided the dies to our vendor, which will ensure timely deliveries and proper quality.”
Nakra was confident of a quick turnaround in the division’s fortunes and predicted that the division would notch significant growth in the next two years.
The company did not respond to an IANS query about whether competition from Hero Ultra, another electric bike, was also a factor that affected the performance of the division.
The bikes offered by Hero Ultra, a collaborative venture between the Hero group and Ultra Motors of Britain, had sold 10,000 units by mid November 2007 and has set for itself a goal to achieve a sale of 20,000 units by March end this year.
The turnaround forecast by Nakra could still be reality. According to an AC Nielsen Survey, the potential of electric vehicles for 2007-08 was around 200,000 units and is projected to grow to 490,000 units.
The electric vehicles would be immensely popular as the price of running an electric bike worked out to be an unbelievable 10 paisa per km, the cost of charging the battery.
Electrotherm, however, has clocked 100 percent growth for the group as a whole in the wake of robust performance by the engineering and steel divisions.
For the third quarter ending Dec 31, 2007, it achieved a turnover of Rs.3.83 billion as against Rs.2.11 billion during the quarter ending Dec 2006.
For the nine months of fiscal 2007-08, the turnover was Rs.9.03 billion as against Rs.4.42 billion for the same period last year.
The growth in the first nine months not only doubled but the company also surpassed the annual turnover of Rs.7.34 billion in March 31, 2007.
Much of the growth has been contributed by exports, which generated earnings of Rs.1.13 billion as against Rs.380 million in 2006.