Diversified engineering company Greaves Cotton Ltd plans a capital expenditure of about Rs 110 crore this year of which majority will be on its electric two wheeler plant at Ranipet in Tamil Nadu, said a top official.
He also said the electric two wheeler plant is expected to roll out its product by the end of this year.
"We plan to invest about Rs 110 crore towards capital expenditure this year. About Rs.70 crore will be for the electric two wheeler plant at Ranipet to be commissioned by the end of this year," Nagesh A. Basavanalli, Managing Director and Group CEO told IANS.
The Rs 1,500 crore turnover group will be funding the capex out of its internal accruals, he added.
Greaves Cotton has signed an MoU with the Tamil Nadu government to invest about Rs 700 crore over the period of 10 years to set up a plant with an annual capacity of one million units.
Initially the production capacity will be about one lakh units per annum and it will be increased to one million units over a period of time and discussions are on for development of vendor base for various components, Basavanalli added.
Greaves Cotton got into the electric vehicles segment by acquiring the Coimbatore based Ampere Vehicles.
The Ampere Vehicles last year bought 74 percent stake in the Noida based electric rickshaw maker Bestway Agencies rolling out Ele brand vehicles.
The balance 26 percent in Bestway will be acquired in 2022.
Basavanalli said the group has no immediate plans of consolidating the electric vehicle's production at Ranipet.
"The E-Rickshaw market is in North and East and we are looking at other products that could be made at Ranipet," he said.
Last year the group sold 27,310 electric vehicles (two wheelers 22,661 units, three wheelers 4,649 units) up from 22,918 units (two wheelers 18,536 units, three wheelers 4,382 units) sold the previous fiscal.
With a market share of 20 percent in the electric two wheelers segment, Basavanalli said the demand is outstripping the supply after COVID-19 breakout with people opting for personal mobility instead of shared mobility like travelling in a three wheeler.
"One of the COVID-19 impacts is that the shared mobility like three wheelers have taken a hit. Post Covid-19 unlocking the demand for electric vehicles will start increasing," Basavanalli said.
With the sales volumes picking up, the group expanded the two wheeler showrooms to over 300 last year.
The group's electric two wheeler sales clocked Rs 180 crore revenue last year with the demand for high speed scooters picking up.
According to Basavanalli, the group will also come out with electric vehicles for carrying goods.
Speaking about the 1.5 litre multi-fuel engine, he said it is ready and talks are on with automobile makers for their powering light commercial vehicles.
Barring the electric vehicles, the group last year suffered negative growth in the sales of engines for automobiles, non-automobiles, gensets and light equipment due to COVID-19.
However, during the last quarter of last fiscal sales of non-automobile business went up.
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