The Hindu Business Line : Ultra Motors to acquire vertical supply chain

Ahmedabad, Sept. 24 Ultra Motors Company (India) plans to acquire a vertical supply chain by January to boost its marketing strategy aimed at a projected turnover of $22 million (about Rs 90 crore) next year.

(The company had disengaged from its erstwhile partner Hero Exports Ltd this year to manufacture its own range of petrol-free, battery-run light electric vehicles (LEVs).

“We have identified the chain to be acquired in the National Capital Region (NCR) near New Delhi. It is in the mechanical and plastics areawhere we feel an Indian supply chain could play a pivotal in bringing down our costs, the battery and other equipment being brought in from our UK-based parent company,” Mr Deba Ghoshal, Director (Marketing), told Business Line here after the Gujarat launch of a new range of two-wheeler LEVs.

He said the company is looking for contract manufacturing instead of setting up its own manufacturing plants. He, however, declined to name the proposed acquisition. Ultra Motors plans to launch three more new models in both high-speed and high-range categories, taking their overall tally to five products by March 2009.

It had so far launched two products, Velociti and Marathon, for the age groups of 28-plus years and 14-24 years, respectively, and sold 22,000 of these scooters so far.

While Velociti can achieve a speed of 40 kmph and a range of 50 km per charge, Marathon can run up to a speed of 25 kmph and has a range of 100 km per charge.

The company may also introduce a hybrid three-wheeler in the next 18 months. Asked about unorganised players in the segment, particularly in Gujarat, Mr Ghoshal said some 50 of them had emerged in the market across India.

Gujarat has contributed 25 per cent towards all-India sales in 2008-09, he added.

The company also plans to increase its number of dealerships across India from the existing 150 to 250 by the end of this fiscal to achieve its targeted turnover by next year. Ultra Motors, which invested Rs 60 crore to set up its existing plant in the premises of Hindustan Battery Ltd (HBL) at Hyderabad, with a capacity to manufacture 400 two-wheelers a day, has committed a total investment of Rs 140 crore in the next three years in product development (40 per cent), marketing and distribution (40 per cent) and manufacturing (20 per cent).

Earlier, Ultra Motors Managing Director Ganesh Mahalingam said while the number of cars is projected to increase globally from 590 million in 2002 to two billion in 2030 and a total 60 per cent of population turning urban by then, such battery-run scooters would become more popular. This year, the total market for such two-wheelers in India is expected to be around 1.50 lakh vehicles.