E-bike makers foresee big market

CHENNAI: The nascent electric two-wheeler segment, currently estimated at Rs.4.5 billion, is set to grow this fiscal, say manufacturers.

But while all are now stepping on the gas to boost sales, their marketing planks differ: while some say their sales pitch would revolve round "convenience", for others, it's "economy" at a time of spiralling fuel price.

Ultra Motor India, the New Delhi-based subsidiary of UK's Ultra Motor Co., estimates the Indian market this year to grow to around 240,000 units, up from 170,000 units sold in 2007-2008.

"We are targeting 60,000 units this financial year," says the company's director of marketing Deba Ghoshal.

So buoyant is Ultra Motors about prospects in India, that earlier this year it severed its year-long technical and joint marketing agreement with Hero Exports to set off on its own. It now says it will launch both high-speed and low-speed electric two-wheelers.

It also plans to increase its dealer network from 150 to 300, having sold a little more than the 20,000 units it had targeted last year in partnership with Hero Exports.

Additionally, says Ultra Motor chairman Joe Santana on the company website, what was also heartening was the 10 percent "conversion rate" - the pace at which Indians users were switching from the petrol to the electric models.

Like Ultra Motors, Electrotherm India, an Ahmedabad-based manufacturer of steel and engineering products, sees a future in electric vehicles in India; it has now formed a separate division - Indus Elec-trans - to build electric and hybrid electric vehicles under the YOByke brand.

"Our plan is to sell 60,000 units this year, targeting revenues of Rs.1.8 billion. We will increase our dealer network to 300 by the end of this year from the current 190," director-operations Avinash Bhandari said of Electrotherm's plans. 

Down south, Tube Investments of India Ltd (TI) announced that it would introduce its new e-bike under its popular bicycle brand BSA at a Rs.200-million plant set up especially for this venture at Ambattur, Tamil Nadu.

TI plans to begin production in September, churning out 4,000-5,000 e-bikes a month, the vehicles priced between Rs.23,000 and Rs.36,000.

"The majority of the respondents to a survey carried out by our advertisement agency JWT were in favour of the BSA brand for the electric two-wheelers," TI Cycles senior vice-president Arun Alagappan said.

While the various players are buoyant about the prospects for this segment, the way forward seems to differ. TI, and another south-based two-wheeler maker TVS Motor Co., say they will market their e-bikes on "ease of use" and "convenience" planks.

"There is not much of a difference between the real operating costs of a battery-operated two-wheeler and the petrol models," S. Srinivas, general manager of TVS Motor that owns Scooty Teenz Electric brand said.

Similarly, TI's Alagappan downplayed the economy-based marketing strategy, saying: "People are aware of the economic advantages that an electric vehicle brings to them."

The opinion in northern India is different: companies like Hero Electric, Electrotherm and Ultra Motor will promote their products on the economy platform, highlighting the advantages of using a battery-operated two-wheeler against the petrol-run bikes.      

Hero Electric chief executive Naveen Munjal holds a different view. "Fuel economy is the best way to sell two-wheelers in India," he said.  

"Economy still remains the basic value proposition," Mukesh Bhandari, chairman of Electrotherm, said.