Why Benelli put its manufacturing plans on hold after Government’s EV push

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. Benelli India had plans to explore investing in a secondary facility once the plant had attained 100 per cent utilisation.

By: | Updated: August 7, 2019 10:38 AM
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Last year, Benelli had 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. According to 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.

Vikas Jhabaakh, Managing Director, Benelli India said that 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. 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. 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 in a secondary facility once the plant had attained 100 per cent utilisation, 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.

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.

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