EV push forces Benelli to put India mfg plant on hold

Italian superbike motorcycle-maker Benelli, which re-entered in the domestic market last August, has put on hold its plans to set up a full-fledged manufacturing facility following the government's dogged pursuit to go for electric vehicles. Benelli on Tuesday had launched its popular global brand Leoncino 500 in the domestic market with a price tag of Rs 4.79 lakh (ex-showroom).

Owned by China's Qianjiang group, Benelli had last year roped in Hyderabad-based Mahavir Group for the local manufacturing and distribution of its motorcycles in India. The partnership entitles Adishwar to assemble, manufacture bikes and import exclusive range of the bikes from Italy and Southeast Asian regions.

As per the plan, an assembly unit was to be set up by the Mahavir group at its investment in the first phase and in the second phase Benelli setting up a manufacturing plant over a 20 acres land with investment, technology and R&D. The assembly unit in Telangana, which is operational since October last year, currently has a capacity to produce 7,000 bikes per year, which can be scaled up to 40,000 units by 2021.

"Right now there is a change in the strategy. Initially our plan was to put up a manufacturing facility as of now that plan has been put on hold. The government itself is talking about moving to electric mobility, so right now we are closely monitoring the government and its policy," said Vikas Jhabaakh, managing director Benelli India.

He said that the assembly plant has the capability of scaling up its current production line to up to 40,000 units per year. Benelli India had plans to explore investing into a secondary facility once the plant had attained 100 per cent utlisation, he said.

"Considering the recent push of the government to move more towards the electric mobility, especially in the sub-150 cc category, we are also closely monitoring the situation to assess the feasibility of where we should be investing our money for the long term," Jhabakh said. But for the 150-cc plus category I think the 40,000 unit capacity at the plant should take care of the demand till 2021, he said The company currently has six motorcycles in the 300- 600 cc range domestic market, in the price range of Rs 3-6.20 lakh.

Government's apex policy body NITI Aayog and the ministry of road, transport and highways are planning to ban petrol and CNG three-wheelers and two-wheelers with engines under 150cc from 2023 and 2025, respectively, a suggestion that has not been received with open arms from the automobile industry. Jhabakh said that after the roll out of the second phase of the FAME (Faster Adoption and Manufacturing of (Hybrid) and Electric Vehicles) policy, the company is looking at the next set of policy as far as its e-vehicles are concerned.

He, however, added that Benelli already have electric scooters in its portfolio, which it is selling in other markets. The focus in 2019 has been on strengthening its relationship with the stakeholders including the customers and the dealers, "In 2020 we are going to target the volume and looking to sell around 5,500 bikes," he said.

He said the company plans to roll-out its 400-cc Benelli Imperiale around the forthcoming festival season this year, which will be in lower price range and take on the same segment bikes from rivals such as Jawa and Royal Enfield. In addition, two new motorcycles in the 250 cc segment are also planned to be launched by the this year end.

"After the launch of Imperiale, Benelli India will offer bikes in Rs 2-6 lakh range. We expect this bike to drive volume and allow us to expand the market further," he said. Benelli sold over 6,000 bikes in India since its launch in the country three years ago.

It sold about 1,000 units from January (when it started delivery of bikes) till July this year and hopes to end the year with the sales of 2,000 units, he said..

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