Case: Electric Car- Reva

Issues in the Case:

1) Size of the car: Compared to other substitutes available in India, this Electric car-Reva car was very small. Even this car was not in segment of small, middle and long sized car. 2) Petrol price: One of the important elements were also that, in 2001/02 the petrol price was also very less in that case people felt that rather then trusting Reva other old petrol models were better. 3) Electricity: Ultimately this car was totally running with the help of the electricity. So in that case India was a country, where there much so much cut down and shortage of the electricity, so there is so much problem of charging of the car. One cannot even charge the car on highway or on road. 4) Speed: Reva was good for the people, who are interested in driving slow, because as it cannot run faster then 60-80 km/hr, people preferred it very less, because other cars in the same range offered car which were having speed limit of 120-140. 5) Mileage: At the very initial point mileage was not much point of concern, but people taught that what after certain years and as this car was running almost for 60 to 80 kilometer for charging it once, what if they wish to go for long journey. So ultimately they cannot use it to go away from the same city. 6) Price of car: Now except from the feature, If we see from the other point of view, the other obstacle was the price feature of the car. As mentioned in the case and other literature the price of the car was almost similar compared to other lower range petrol cars that were around 2.3 to 3 L. 7) Family size: If we see the Indian scenario of 2001/02, concept of joint family was very famous, so what happened in that case was, that as it offers sitting space of only 2 adults and 2 small children, so it cannot carry at least 3-4 adults. In that case it can be considered as a big issue for selling. 8) Maintenance: India was just started developing in the 2001/02, so ultimately there were very bad roads and in many of the parts there were almost no roads, and as the reva was an electric car, people have taught that till what time it would have been going well, as its new, it will definitely run well but after certain period of time it will definitely demand

for beater maintenance. As there are almost no other such cars ion market, who so ever will service this kind of cars, what so ever they will demand they have to pay and even as it is newly entered in the market its availability of parts was major concern for the purchaser. 9) Sales promotion: At the time of introduction, the company taught that as its the first product of such new category, it will not required promotional activity and it will catch and attract huge market share automatically. That was the biggest mistake they have ever done. The result was that people were not properly got aware about such product and ultimately product failed badly. 10) Punch Line: At the introduction time companys tag line was I dont pollute when I commute.- so as this line itself says about the pollution, and this statement starts with negativity. At that time people were not aware and concerned about the pollution. So they took it negatively and make it is as second option to buy. 11) Target group: As mentioned in the case the target group for this car was ladies and old people. But as they failed to focus this properly, more and more man started buying it and ultimately they didnt got satisfied and came out with negative impression. 12) Reliability and Performance: People were seeing this kind of car for very first time in that case it was very difficult for them to trust on such product. 13) Infrastructure: Already mentioned above that in 2001/02 India was very less developed country and its infrastructure was very bad, in many of the place there were no roads and wherever there are roads, they were in very bad condition. 14) Competition: The biggest competition of Reva in that time was Maruti-800. Maruti 800 was far ahead of Reva in various comparisons.

Strategies to improve sales: If Reva want to reestablish its market in India, the following steps can be taken in to consideration:
1) New name: Reva was failed in the past o it is very much essential that it come out with the new brand name and launch it with the new different name. 2) Sales campaign: Supposing if Reva is coming back in the market, it has to do make huge sales campaign to make the people aware about its product. And there is good probable market if it promotes well. 3) Duel operation mode: This car was initially offered with one operation mode that is Battery. So if it is coming again in the market, it has to be come along with the duel operation mode like battery and diesel or petrol. Because as it having low capacity mileage, for long drive it is needed to have duel operation mode. 4) Improve sitting capacity: Basically this model offers only sitting capacity of 2 adults and 2 children, so it is necessary to at least make it 4 adults. 5) Faster speed: The maximum speed of the old Reva is 65 km/hr. so as the other similar models like Nano and other models are offering good speeds so this 65 has to be around 85-90 km/hr. 6) Safety: From the old look of Reva we can say that it is less safe. So in that case it has to offer some more safety features. 7) Additional feature: Rather than simply offering normal features it will be difficult capture market, so has to come out with newly additional features. 8) Select Target segment: Target segment for any product is very much essential. So it has to select some target group for such product, in this case of Reva it can be targeted to women, college students, aged people and lower and middle segment people. 9) Stylish look: If we see the old Reva, it has very small and cartoonish look, which is not accepted by the male genders for their regular use. So In that case some executive and dashing look is required. 10) Price reduction: Rivas price was just similar to Maruti 800 and alto, so if they include above features then the price will be around 2.5 to 3 L, is acceptable but above that people wont accept it. 11) Low maintenance cost: The car should be designed such that it requires maintenance cost as less as possible, and its parts can easily available anywhere and of course at cheaper rate.

S.W.O.T Analysis:
1) Strengths: No Competition in the EV Segment. Environment friendly Economic to Drive (0.4 paise/KM) Government subsidies (8% excise duty) Successful in Export Markets (no 1 in UK) Easy to Drive (gearless) Easy to park (small size) 2) Weaknesses: Competition from gasoline vehicles Small size High Price Low consumer awareness Low penetration in domestic market Low aesthetic appeal Low top speed (65 KM/hr) Small driving range (upto 80 KM) Safety concerns Huge capital investments 3) Opportunities: Huge untapped EV market Growing demand of green technologies Rising fuel costs Growing road congestion in urban cities 4) Threats: Government incentives to gasoline vehicles Entry of competitors Stringent safety requirements anticipated Availability of hybrid vehicles

Submitted By, PARTH V PUROHIT 18 AMA PGP-IBM 2010/12