After an exclusive interaction with Terra’s CEO on 16th March 2021, The Economic Times was able to get more insights on the new production base in Assam and strategies involving product procurement and sales.
Summary of the article.
In the interview, the CEO, Akihiro Ueda Terra Motors spoke how we are planning to boost local sourcing of components such as motor, controller, battery, rear axle in India and other parts that come from overseas through joint production facility establishment in India for more stable logistics and production which can enhance business efficiency in India. Thus, we are planning to shift all the production to India.
On launching EV bikes in Nepal, the CEO claimed that we are seriously planning to replace all petrol bikes to EV to make a better society in India. Moreover, the target price is around Rs 90,000 with the specifications of 80-100 kilometer range per charge, and max speed of 60-80 km per hour. We plan to introduce both an e-bike and an e-scooter.
On being asked about a new product launch or launch of low-priced exclusive variants in the states, he replied that we consider Assam as a production base which specializes for the east India market. Using the understanding of East-Indian market demand such as price range, product design etc, Terra will expand its business in north-eastern Indian States such as Tripura. Additionally, Terra will focus on expanding in areas with lack of transportation infrastructure, especially rural areas.
Considering the guidelines attached to the incentive scheme(FAME II) such as range of 140 km, top speed must not exceed 70 kmph, price cut-off is Rs 1.5 lakh, we will be requesting government to ease these restrictions to make incentives available for more number of bikes as most of the models will be out of the scope of FAME II scheme. It will be quite difficult to manage the cash flow due to the current system of tax. Although sales GST is 5 percent only, 28 percent GST is paid by most of the Original Equipment Manufacturers(OEMs). Cash is blocked by this imbalance at OEM level. Thus, we expect the government to improve this policy so that many companies come into this sector to grow the EV industry.
Now, due to the significant increase in prices of commodities and raw materials such as steel, copper, aluminium and zinc and plastics, there has been an impact on our business. Consequently, we try to add more value to our service so that increased price will appear more reasonable. We currently focus more on R&D to develop our products to create good brand value in the market.
The growth during the pandemic was no magic, however, it was through good strategy that Terra was able to pull out. With the network of 250 dealers all over India and in every state, zonal Terra unit team, we were able to sell and provide service which helped in monitoring and supporting dealers and customers more quickly and efficiently. Due to COVID, the government announced a moratorium on loans which resulted in due payments of customers EMIs to the financier between April 2020 and September 2020. Consequently, most of the loan portfolio was damaged badly and it drew more attention on recovering the loan portfolio instead of new loan generation. Thus, impacted our sales as the automotive sector sales always come with finance.
Read: Planning to set up a production base in Assam: Akihiro Ueda, CEO, Terra Motors
About Terra
Terra Motors is a global venture, which began in Japan, that aims to become a leader in sustainable e-mobility. “creating new industries and making society more convenient” is our fundamental vision. We have developed, manufactured, sold, and provided after-sale services for EV cars (electric two-wheeled and three-wheeled vehicles). We have the largest share of the electric three-wheeled vehicle market in India.
We are currently working to expand our geographic base beyond our Tokyo headquarters into three additional Asian countries. Our mission will continue to seek to contribute to the realization of a prosperous society by improving the livelihood of individuals in the e-mobility industry, particularly dealers, and, more specifically, by creating employment opportunities for low-income people around the world.
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