Gujarat is the new automobile hub

Gujarat seems to be the hot spot in India this year. After all, this state boasts of building Tata Nanos. Now, it seems to be the apple of all eyes as all the automobile manufacturers are trying to set up their plants there. The latest to enter the bandwagon is Hyundai Motors India Limited. This news comes on the heel of Hyundai preparing to invest Rs 400 crores for manufacturing diesel power plants. Dholera is the place where a few of Hyundai officials were spotted visiting. Early on, another batch of Hyundai officials had visited this site and they confirmed to their affinity to this place, however they couldn’t commit to anything solid and said that talks are still going on. As of now, their recommendations and observations ahev already reached the Hyundai top brass and it is estimated that the company would take a decision by the start of the new year.

This particular area is spread over 80,000 hectares and is one amongst the special investment region (SIR) in Gujarat. To add to the convenience factor and to lure more investors, the Gujarat government are setting up a second international airport in the vicinity. This proposed Hyundai plant is just 92 kms away from the airport region. As of now, India’s second largest car manufacturer only has 2 manufacturing plants in India and both are located in Sriperumbdur in state of Tamil Nadu. Due to the heavy demand of its cars, they are thinking of ramping up production and so the need for one more production facility. As it is as of now, the company have to source their diesel engines directly from Korea. This is the reason why diesel engined cars from the Hyundai stables are a bit expensive. After this new facility is set up, Hyundai would be manufacturing diesel engines in India for their Verna, i10 and 120 range of vehicles. If the demand rises, they may even make the Hyundai Santa Fe in India.

Speaking of Gujarat market, there is one vehicle manufacturer, Mahindra and Mahindra who are yet to consider this area for sale of their Mahindra Reva-I vehicles. The reason given is that the Gujarat government’s total lack of apathy towards electric vehicles. However this hasn’t stopped the manufacturer from percolating its used electric vehicles into the used car market in Gujarat. Since the question of state government incentives doesn’t arise for the used car market, a Mahindra Reva-I vehicle would be a good choice for those looking for an electrical vehicle. On a single charge, the Reva-I runs for around 70-80 kilometers. This however depends on the way you drive it. It is thought, sufficient for those trips to the vegetable market. Some of the dealers quoted that they get about 10-15 enquiries per day however they can manage to sell only 2 or 3 cars. We had reported earlier this month that the Mahindra Reva-I was launched in the city of Pune and has a price tag of Rs 3.1 lakhs.

Interestingly, Mahindra sources say that they are hopeful of a good response for the Mahindra Reva-I in the used market since this car runs on a battery and this battery has a life of only 3 years and has to be replaced after that. The cost comes to approximately rs 50,000. All the current items in the used market have had their batteries replaced and are as good as new. In this way, One wouldn’t have to pay the price for a new car however still get one in mint condition at half its price. In the New Delhi market, the new cars are priced at Rs 2.7 lakhs whereas in the Bangalore area, the Mahindra Reva-I goes for only Rs 2.5 lakhs. The reason for this low cost in a new car is due to the heavy government subsidies chipping in. The price for a used Mahindra Reva car in Gujarat as of now is Rs 1.4 lakhs and would go up or down depending on the make and model.

After Mahindra and Mahindra picking up 55.2% stake in the Chennai based Maini Reva company, the latter has been growing in leaps and bounds. It also signals Mahindra’s presence in the electric car segment which not many of the major car manufacturers in India can boast of. After acquiring the majority stake, Mahindra and Mahindra formed a new company namely Mahindra Reva Electric Vehicle Company. This company would launch a 4 seater electric car early on  in 2011 and it would be named as the Reva NXR. To this very effect, Mahindra and Mahindra are also preparing a new plant in Bangalore. Mahindra and Mahindra also have got access to electric car technology from Maini Reva and would use it in their SUV range namely the Mahindra Scorpio, Mahindra Bolero and Mahindra Xylo. Whether it would be used in the Mahindra Renault Logan is doubtful however we can still keep our fingers crossed. Mahindra also plan to have a brand ambassador for the electric vehicles so that they have a new ad campaign to promote this vehicle. An electric car makes sense as a second car since it doesn’t pollute the atmosphere, there is no need to fill up petrol and all one has to do is charge it overnight, go for those small trips. Agreed it does have it disadvantages with the low range that they offer as of now and the expensive replacement for the batteries. Mahindra and Mahindra chairman, Mr Pawan Goenka had committed earlier this year that they are thinking of introducing cheap technology for batteries and ones which would have a higher replacement gap. They have already begun testing these batteries in prototypes and we do hope that this make to the production line up very soon.

All said and done, it seems that the state of Gujarat would definitely be a business center hub for automobile manufacturers as reports trickle in that even Ford Motors India are in the process of setting up a new plant there. Ford motors India only have a single manufacturing facility in Chennai and are looking forward to introduce about 8 new models in India by the end of 2015. For this goal, they want to increase production facilities and setting up a new plant is the only option since the existing one is already overworked.

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