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Benelli rethinks plans for building bike factory in India after Govt's sustained EV push

The initial plan included investments for a research and development (R&D) centre, a manufacturing facility and a parts supplier park along with its Hyderabad-based partner Mahavir Group.

August 06, 2019 / 04:49 PM IST

Benelli, the Italian performance bike maker owned by a Chinese company, has scrapped plans of setting up a manufacturing plant in India after the Center's sustained push for full electric mobility.

The initial plan included investments for a research and development (R&D) centre, a manufacturing facility and a parts supplier park along with its Hyderabad-based partner Mahavir Group. These were announced by both entities in August last year.

But with the government's continuous push for battery-powered commute, the Indo-Chinese company was forced to rethink about executing its plans.

Vikas Jhabakh, MD, Benelli India said, "As per the earlier plans, we were required to set up a manufacturing plant in India. But that is not the case anymore given the uncertainty towards the future of non-electric vehicles. The government has made it pretty clear that the future of vehicles will be electric. This makes the viability of business for a manufacturing plant that much unreasonable since these are huge investments we are talking about".

In China, Benelli has electric two-wheeler products in the low and high powered categories. Jhakabh added that it may look at bringing them to India if 'there are suitable business conditions for them'.

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"If we find that the market for electric products is developed and that consumers are willing to spend that much then we can bring it here. The R&D is already there. We just need to tune the products to suit Indian requirements", added Jhabakh.

The company on August 5 launched an all new, locally assembled model Leoncino 500 in India at Rs 4.79 lakh (ex-showroom). Plans are afoot to launch at least half of dozen more models over the next 12-15 months.

These include three models with a 250cc engine and a 400cc commuter cruiser. Benelli will be re-entering the 250cc category after a gap of of more than a year. These launches will spruce up Benelli's volumes substantially, the company hopes.

"The Leoncino was our sixth model in India. We will launch the 250cc bikes as well as the 400cc commuter cruiser bike around the festive period. We plan to go aggressively after volumes in 2020", added Jhabakh.

In the seven months since Benelli re-entered India, it has sold '800-1000' bikes with a monthly sales rate of around 100-120 bikes. With the Leoncino, the company hopes to sell 100 units a month alone.

"We would be very disappointed if we do not get to 300-350 units a month after the 250cc launch. That is the minimum we are targeting", added Jhabakh.

Benelli has a Rs 40 crore assembly facility in Hyderabad which has a capacity to produce 7,000 a year. This can be scaled up to 40,000 a year by 2021.

At present Benelli has 19 dealerships across 18 cities, which it plans to increase to 60 dealerships by 2020.
Swaraj Baggonkar
first published: Aug 6, 2019 04:12 pm

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