Ajanta, the makers of quartz clocks and home appliances, is planning to buy an electric car manufacturer in the Guangzhou province of China, as it plans to launch a sub-Rs 1 lakh car in the Indian market.
The Rs 1,500-crore company, which also makes electric bikes, vitrified tiles and CFL lamps, has made a layout of Rs 100 crore to acquire an existing assembly unit of an undisclosed carmaker, which can roll out 5,000 units a year.
The deal is likely to be inked within this year, as valuations are currently low.
An executive in the company, who did not wish to be named, said the group would come out with its own brand ‘Oreva’ for the cars and indigenous design, so that it suits the urban population that it intends to target. Oreva, derived from the names of Ajanta’s founder OR Patel and his wife Revaben, is an existing brand for its tiles.
Ajanta Group director Jaysukh Patel refused to comment on his acquisition plans. He, however, said:
We have not yet decided on it, but are seeking the government support, so that we can develop cheaper vehicles for the Indian market. VAT and excise duty put together make almost a fourth of the total manufacturing costs of the vehicle. If the costs are lowered, we are capable of manufacturing battery-powered cars at Rs 1 lakh or less
The acquisition will help the company acquire technologies for moulding, designs and battery production, among others. Also, it would help in creating and establishing a new market for electric cars in India.
Two years ago, the group ventured into two-wheeler electric vehicles with an investment of around Rs 300 crore. It manufactures close to 10,000 bikes every year at its Kutch facility.
Mr Patel, along with his father and uncle Manubhai Patel (who now runs the Samay Group), had launched Ajanta clocks in the early 1980s. He stunned the market with sub-Rs 100 clocks, has already designed a prototype of the vehicle and is personally driving it around on his 400-acre manufacturing facility near Morbi, near Rajkot. The prototype runs 120 kms per one charge of 7 units of electricity, costing nearly Rs 35 per charge.
Mr Patel said
We have designed more than 10 battery-powered cars of four-seater and six-seater capacity and are testing them now.
He also claimed that the six-seater would cost nearly Rs 1.5 lakh, while four-seater can be available at Rs 1 lakh.
Source - Economictimes