Electric car Reva's sales pick up amid slowing economy

Carmakers may be applying brakes to their expansion plans, but electronic carmaker Reva is shifting into top gear. It's banking on the economic slowdown to boost sales. CNBC-TV18's Vineetha Athrey reports.

 

Electric carmaker Reva is all charged up. It's chalking out some big expansion plan that includes steering into 15 indian cities and 20 countries in 2009. Currently, the Reva has a presence in Delhi and Bangalore, and 10 countries including the UK, Norway and Belgium. It is now test marketing in 10 new countries including France, Philippines and countries in South America, where it plans to begin selling the car in the next three to nine months. Reva says a slowing economy will mean more demand for cost-efficient electronic cars.

 

Chetan Maini, Founder and CTO, Reva, says, "During the previous nine, there has been an increase in growth by 20-25%. We should close this year with a 30-40% increase in growth from last year. The fact is: during a recession, people look more at how to save money and electric cars cost less and an average person saves Rs 4,000-5,000 per month."

 

About 65% of the 800 cars to be produced in 2009 will be sold domestically. The rest will be exported. The company plans to increase production to 3,000-4,000 cars next year, and to about 10,000 the year after. Funds, it says, are not a problem.

 

Maini adds, "We have funds from private equity and venture capitalists. We have even got some from Global Environment Fund and from Firstsource. The Maini group is also putting in internal funds."

 

These expansions will cost Reva around Rs 20 crore, which will go into new plants and better technology. A new plant with a capacity of 30,000 vehicles is set to take off soon. The company's technology spending is also seen rising by 30-50% this year. All this, to ensure the market sees one new model or variant every year.