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Business Strategy Electric Car: Reva - D Sirisha The case discusses the launch of the first electric car in India - Reva, y the Ban!alore- ased Reva Electric "ar "om#any$ It talks a out the Indian #assen!er car industry and the ste#s taken y the %overnment of India as well as the ma&or #layers in the !lo al automo ile industry, to reduce automo ile #ollution$ The case also e'#lains how electric vehicles can hel# reduce automo ile #ollution and e'amines the future of electric vehicles, #articularly Reva, in India$ It's like running a car at the cost of a two-wheeler. - Sudarshan Maini, Chairman, Reva Electric Car Co., in August 2000. The largest part of the Indian car market is for small, affordable vehicles that can be driven in narrow roads and parked in the tightest of parking lots. - Chetan Maini, Managing Director, Reva Electric Car Co., in 2001. Introduction In (ay )**+, Reva+, an electric car, was launched in Ban!alore y the city- ased Reva Electric "ar "om#any ,RE""-$ Reva was claimed to e India.s first /ero#ollutin!, attery-driven car with a runnin! cost of &ust Rs$) *$0* #er km$ One of the first electric cars in the world to !o in for mass #roduction, Reva was slated to ecome the chea#est car in India$ It was #riced at a out Rs$ *$) mn and the first +* cars were delivered to customers in 1uly )**+$ Reva !enerated a lot of e'citement in the Indian automo ile industry since it offered many si!nificant advanta!es over conventional cars$ Its low runnin! cost, !earless drivin!, dent-#roof ody material and other state-of-the-art technolo!ies made it an alternative #acka!e$ Reva was soon ein! com#ared with India.s lar!est sellin! car, (aruti 2**$ Thou!h availa le at almost the same #rice as Reva, (aruti.s runnin! cost was almost four times hi!her than that of Reva$ The car was also seen as the answer to reducin! the increasin! #ollution levels caused y to automo iles$ (edia re#orts claimed that Reva was all set to rin! a out a revolution in the Indian #assen!er car industry$ Some analysts claimed that the electric car would create an entire new market and attract small families in hordes$ 3orma/d Sora &ee, 4uto 4nalyst and Editor, Autocar India, said, 5If Reva.s claim of kee#in! the runnin! costs at Rs$ *$0* #er km is achieved, the car will e attractive to costconscious consumers who are ready to com#romise on the limitations of an electric car$5 The Indian assenger Car Industry

Till the late +67*s, the Indian #assen!er car industry offered limited choice to the customers, with only two #o#ular models in the form of 3industan (otors. ,3(4m assador and 8remier 4utomo iles. ,849- 8admini$ The !overnment not only controlled the #rice mechanism in the industry, the entry of forei!n #layers was also strictly re!ulated$ Table I: The Indian Passenger Car Industry Segment Economy (up to Rs. 0.25 mn) Mid-si ! (Rs. 0.25 " Models* Maruti Omni, Maruti 800, Padmini. Approximate marketshare of the segment( !!!"#$$$% 46.80%