Electric Car Reva

The Future of Reva Contd...

Chetan said, "The development of the new model is a result of the feedback of our very satisfied customers in Bangalore, where over 150 cars are now running. The introduction of climate control seats is in line with Reva philosophy of using cutting edge technology, patented by Amerigon, leaders in advance automotive technology." RECC has planned to launch the car in other cities like Jaipur and Hyderabad by the end of 2002. RECC is currently working on a new version to be launched in the UK market. The company has also entered into alliances to export the cars to Nepal. It was also negotiating the export of the car to the UK, Japan, Mauritius, Israel, Norway and Sri Lanka. Exports to these countries were expected to start by the end of 2002.

Sudarshan said, "We will be sending some cars to Nepal soon and have signed MoUs with Italy, Norway, Japan and an agreement with Israel and what we will be able to offer will be much cheaper than the EVs available outside the country. For instance, our product will cost around $9,000, while an EV in other countries come at around $20,000 or more." However, some analysts are skeptical about Reva's success in the long run.

They feel that it would be difficult for RECC to promote the car, as the petrol-driven Maruti 800, the largest selling car in India, was available for about the same price as Reva. In addition, Maruti had a higher seating capacity (Refer Table VI). Moreover, Reva could go only up to 80 km and had to be charged before that limit.

As there were no mobile recharging facilities in India, the car had to be charged at home or at the working place. Other major Indian automakers were also entering the segment in India. In 2001, Mahindra & Mahindra was testing its three-wheeler 'Bijilee' and was planning to enter the 4-wheeler segment. However, Sudarshan seemed to be confident of success saying, "We are in a totally different market segment with the Reva being marketed as a personal 'city' car."

Prof. C.C.Chan, president of the World Electric Vehicle Association, said, "The future of EVs is bright... for a sustainable ecology, we need to have environment-friendly vehicles. But it depends on whether you can mass-produce, ensure reliability and good performance at reasonable costs. These will define its future." It remained to be seen if Reva could spark an electric revolution in the Indian passenger car industry.

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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