Electric Car Reva

On the Road to Reality Contd...

As per the agreement, customers could get loans covering about 75-85% of the cost of the car. In February 2002, Reva was planning to extend its agreement with ICICI for leasing the cars at a nominal cost. According to the agreement, Reva would take care of all repairs, and any customer could own the car on a pre-determined monthly amount. After three years, the customer could either retain the car or return it to the company. The insurance premium on Reva was also low and RECC offered to replace the car in case of repairs or accidents. Sudarshan said, "We will ask no questions.

They will get to drive a new car till the earlier one is repaired and the insurance claims are settled." The company also offered to make customized cars to suit individual requirements. In February 2002, RECC introduced a new scheme under which it agreed to buy Reva back if a customer was not satisfied with its performance.

The customer could get back the money invested excluding about Rs 43,000, which accounted for taxes and insurance. Sudarshan said, "It is a new concept and the scheme is for a limited period. We want to promote electric cars as much as possible. What is heartening is that not a single customer has brought back his car to us." By April 2002, RECC had sold about 180 cars in Bangalore and Goa.

The Future of Reva

In late 2001, RECC reported that Reva was well accepted in the four cities it was launched and that the company was working on new versions for the domestic as well as international markets. Ashok Dharwadkar, chief financial officer in a technology company, who was the third Indian owner of Reva, said, "The performance of the car is good and the company offers good service. There are still a few nagging problems like high noise level and fall in efficiency while driving uphill." In January 2002, RECC launched Reva Deluxe at the Auto Expo 2002 in New Delhi. The Deluxe model had a new look with upgraded interiors, defroster with heater, a stereo system, and climate control seats (CCS)¹².

Electric Car Reva - Next Page >>>

12] Depending on the climate, the seats are heated or cooled. The technology was based on the Solid State Heat
Pump from the aerospace technology. It affected the back and bottom of the passenger, most vital for comfort.

Case Details

Case Code : BSTR030
Themes: Mergers Acquisition and Takeovers
Case Length : 9 Pages
Period : 2001
Organization : Reva Electric Car Company
Pub Date : 2002
Teaching Note : Available
Countries : India
Industry : Automobile & Automotive

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