Lohia Group enters into automobile sector

New Delhi: The Noida-based Lohia Group announced its foray into the automobile sector with a Rs 150-crore investment to launch electric two- and three-wheeler vehicles in the second half of this year.

The diversified business group, which has set up a subsidiary called Lohia Auto Industries, will set up a greenfield manufacturing facility in Kashipur, Uttarakhand, with an installed capacity of two lakh units a year.

'Recently, central and various state governments have taken initiatives to promote environment-friendly vehicles. Keeping in mind this aspect and soaring fuel prices, we have decided to launch electric vehicles in the country,' Lohia Auto Industries Vice-President Ayush Lohia said.

He said the first lot of the electric two-wheelers from the Lohia stable would hit the market by August followed by three-wheelers in November.

The Rs 400-crore group is currently involved in garment and handicraft exports, steel and brass coil business and real estate. The two-wheelers in below 250W category would be priced in the range of Rs 25,000-30,000, while the 500W-750W category bikes would be available between Rs 30,000 and Rs 35,000, he added. The three-wheelers would cost Rs 45,000-50,000.

Commenting on the company's production capacity, he said out of the installed capacity of two lakh units a year, about 1.5 lakh would be two-wheelers and the remaining would be passenger three-wheelers.

'The capacity is scalable up to 8-10 lakh in the future,' he added. The company has acquired 30 acres in Kashipur, where it is constructing the plant.

For future capacity expansion, it would set up a new plant in the same campus.

Initially, the facility would have about 60 per cent localisation in components, which would be increased up to 70-80 per cent within 3-6 months of the launch, Lohia said.

The company would also set up two research and development centres, one at the plant site and the other in Noida. The company also plans to export vehicles to the US, the UK and European countries, Prateek Jain, senior manager (sales and marketing), said.

'Initially after the launch, we will be exporting about 10-12 per cent of our total production, but as the capacity increases, the export will also increase,' he added.

When asked about the company's expected market share, Lohia said, 'The total electric two- and three-wheelers market size in the country is expected to reach about Rs 6,000 crore in 4-5 years. We are targeting to capture 10-15 per cent share of the market.' The company would sell the vehicles through exclusive showrooms across the country.

'By the end of this financial year, we will set up 80-100 dealership networks in the country and after two years, we will have about 150-200 dealers,' he said. The company would set up showrooms and have a revenue-sharing agreement with dealers in operating the outlets, Lohia added.