Reasons for Re Launching Electric Car – Reva
Reasons for Re Launching Electric Car – Reva
Introduction : The Reva Electric Car Company (RECC) was founded in 1994 by Chetan Maini, as a joint venture between the Maini Group of Bangalore and Amerigon Electric Vehicle Technologies (AEVT Inc.) of the USA. The company's sole aim was to develop and produce an affordable compact electric car. Several other automakers were also aiming to do so, but in 2001 RECC launched the REVA
Reva, started off with a bang : The first electric car in India and the people behind the car were confident of the success of the car. Plans were set and the forecasting team estimated that 1500 cars would be sold by the end of the first year. Three years after its launch, Reva barely managed to sell a total of 300 cars. Reva was subsequently pulled off Indian markets. On May 26th 2010, Mahindra Group bought a 55.2% majority stake in Reva and now has plans of relaunching the car in Indian markets. This article explores reasons for the failure of Reva and what should be Mahindra Reva’s Strategy for achieving success in the Indian market.
* Reva was positioned as a “Green, low operating cost car”. The marketing strategy when Reva was first launched mainly concentrated on the car being green and the first of its type in the electric car segment. But this was not enough to create ripples amongst the consumers. * With a small size, easy to drive (no clutch or gear) and slow speed, Reva was targeted at small families, old couples and female drivers. While Reva had a beneficial cost proposition of only Rs. 0.40 paise per km travelled, it was not a cheap car. Priced at around Rs. 3.75 lakhs, people would have preferred to purchase a Maruti Zen or an Alto which are within the same price range. The major problem with Reva was that it was perceived to be a low cost car, but it was actually not. Also it was not a car that the rich wanted to buy, as it looked below their league. In one word, Reva, was a total misfit. * Aesthetically,
Introduction : The Reva Electric Car Company (RECC) was founded in 1994 by Chetan Maini, as a joint venture between the Maini Group of Bangalore and Amerigon Electric Vehicle Technologies (AEVT Inc.) of the USA. The company's sole aim was to develop and produce an affordable compact electric car. Several other automakers were also aiming to do so, but in 2001 RECC launched the REVA
Reva, started off with a bang : The first electric car in India and the people behind the car were confident of the success of the car. Plans were set and the forecasting team estimated that 1500 cars would be sold by the end of the first year. Three years after its launch, Reva barely managed to sell a total of 300 cars. Reva was subsequently pulled off Indian markets. On May 26th 2010, Mahindra Group bought a 55.2% majority stake in Reva and now has plans of relaunching the car in Indian markets. This article explores reasons for the failure of Reva and what should be Mahindra Reva’s Strategy for achieving success in the Indian market.
* Reva was positioned as a “Green, low operating cost car”. The marketing strategy when Reva was first launched mainly concentrated on the car being green and the first of its type in the electric car segment. But this was not enough to create ripples amongst the consumers. * With a small size, easy to drive (no clutch or gear) and slow speed, Reva was targeted at small families, old couples and female drivers. While Reva had a beneficial cost proposition of only Rs. 0.40 paise per km travelled, it was not a cheap car. Priced at around Rs. 3.75 lakhs, people would have preferred to purchase a Maruti Zen or an Alto which are within the same price range. The major problem with Reva was that it was perceived to be a low cost car, but it was actually not. Also it was not a car that the rich wanted to buy, as it looked below their league. In one word, Reva, was a total misfit. * Aesthetically,