Greaves Cotton aims for the sky with Ampere acquisition

You can sense the excitement in Nagesh Basavanhalli’s voice when he talks of his company’s recent acquisition.

It was barely four months ago when Greaves Cotton bought a 67 per cent stake in Coimbatore-based Ampere Vehicles. Going forward, it has the option to increase this to 80 per cent.

As MD and CEO of Greaves Cotton, Basavanhalli is clearly looking forward to the myriad possibilities in this new marriage especially when it comes to the mobility space. At one end is his company that makes a variety of engines in the three-wheeled space while, on the other, is Ampere which has focussed on electric mobility.

While Basavanhalli is bullish about the road ahead, he is equally kicked about the possibilities of intellectual synergies between the two companies. Greaves has over five times the workforce of Ampere, which is about 200 at best, but size does not always matter by the end of the day.

When Basavanhalli met the Ampere employees soon after the buyout, he was pleasantly surprised to see that the average age here was in the 20s, a lot younger than the Greaves ecosystem.

Young, dynamic workforce

“Not only is it a very young workforce but what is more impressive is that roughly 30 per cent of them are women,” recalls the CEO.

Nearly all of them hail from neighbouring villages and “it is amazing when you look at what these people are able to do”. He also noticed that they were motivated, yet humble, because of their backgrounds. As Basavanhalli says, the average age of a two-wheeler customer is also in the 20s, which means that there is a perfect blend between the demographics and aspirations at either end of the (buying and selling) cycle.

Greaves has an incubation centre in Bengaluru, which has already begun to pool in skills with its counterparts in Ampere. “They are working with them on quality and next generation design. Being Ampere, they have the passion and attitude and this experience will help them blossom even more,” says Basavanhalli. Of course, the business opportunities are immense in the electric mobility arena and a lot of action is expected the following decade. The Greaves CEO points out that Ampere caters to affordable mobility at the bottom of the pyramid.

“When you look at the typical customer base, roughly 200 million people who could be a mix of college students, housewives, drivers and maids, they all want an affordable mobility solution. They also want the freedom and convenience, which means they do not want to use public transportation,” continues Basavanhalli.

Combining capabilities

It was this affordable mobility play that made Ampere such an attractive proposition to Greaves. “We liked what we saw there and we do see an interesting growing market there,” he adds. Greaves has the financial and management bandwidth as well as huge infrastructure strengths in the form of 5,000-odd outlets selling spares and service.

Additionally, its multi-brand service, Greaves Care, now has over 100 outlets. Put in another 9,000-plus mechanics, and the company’s after-market network is quite formidable. From Basavanhalli’s point of view, combining this with Ampere’s platforms/affordable transportation is the best bet forward in the last-mile transportation space.

The fact also remains that this Coimbatore-based company has been among the few serious players in e-mobility for a decade now. It has over 100 outlets with a stronger presence in the south. The marriage with Greaves will now pave the way for a much larger network across the country.

Basavanhalli makes no bones about the fact that his company is very fortunate to have Hemalatha Annamalai, the founder and CEO of Ampere, on board. “She has the passion and will continue to lead the business,” he says. From the Greaves side will come the management bandwidth, after-market, innovation, network and capability. “When you look at some of our people, they have worked in B2C businesses and the two-wheeler business for years,” explains Basavanhalli.

He is confident that both Greaves and Ampere can “combine forces, go to the market and address consumer needs that much more rapidly”. The potential is huge simply because electric is still a sunrise industry where the sky is the limit.

“The majority of vehicles in India are two-wheelers and we owe it to the community also to make sure we are putting cleaner mobility products out there,” reiterates Basavanhalli. Market feedback has shown that there are a lot of first-time buyers seeking that convenience, comfort and freedom. These could range from a housewife, who always depended on public transportation, to a student who ends up walking or travelling in a crowded bus/train.

“We are committed to helping Ampere not just from our network but also building the brand and building the product strategy. That is going to be critical because this is a long game,” says the Greaves CEO. The cooperation will extend to slow/high speed scooters and e-bikes along with some potential B2B applications like aggregators.

In his view, Ampere represents quality at affordable prices because it is eventually about the right value proposition. The total cost of ownership is also significantly lower. The joint mantra with Greaves is to create a value proposition to the end consumer and bring products which he/she would like in terms of design, styling, comfort and convenience with the right quality.

For now, the status quo on branding will continue where the products will be retailed as Ampere though some co-branding ideas could be explored down the line. “There is a synergy but the go-to market will be through the Ampere brand,” stresses Basavanhalli.

Pan-India growth

Greaves also has a pan-India presence and this will help Ampere grow beyond its predominantly southern face. The good news is that there is potentially strong demand for e-scooters and the like in the coming years. Greaves has been part of the three-wheeler ecosystem for years but believes that, by the end of the day, the requirements will still be the same .

“It will still be the last mile transfer customer who is looking for the affordable solution to get from point A to point B. So instead of a three-wheeler, we will also be catering to a two-wheeler customer, either directly or indirectly through aggregators,” explains Basavanhalli.

In his view, the most important thing to do is to bring in the right products and value composition that the customer wants to buy. Ampere has a plant in Coimbatore with enough capacity but once that is saturated, the possibilities of one of the Greaves Cotton plants doubling up cannot be ruled out.

Basavanhalli says it is far too premature to discuss all this now even while “we will review all options as the company continues to grow”. For now, the duo is working out an exhaustive five-year plan which will look at a host of issues ranging from products to plant capacities.

“Electric is a new play for us since we are supplying diesel and CNG. It is a newer area of business, a newer market and newer customer,” he says.

As he puts it, this is a 160-year-old company that is reinventing itself to be relevant not only for today, but for tomorrow and the day after.

On one side is the traditional Greaves that “stands for a lot of good things” and, on the other, is a startup company like Ampere with a can-do and never-say-die culture. “Merge the two and make sure you are agile and we hope there will be a positive rub-off on both sides,” signs off Basavanhalli.

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