First of all, congratulations on your re-appointment as MD and CEO of Greaves Cotton Limited for a period of five years with effect from 27th September, 2019 to 26th September, 2024. How’s your personal journey been with the organisation so far?
Thank you very much. With the support of colleagues and the larger team, my journey with Greaves has been pleasant and I have had the privilege to work with some very talented executives here. The board, other business heads and the organization have been grateful to believe in me right from the beginning which enables me to drive the company and its people in the right direction.
Greaves Cotton Limited reported a four percent growth in revenue for Q1FY20 despite the industry slowdown. Although the market conditions are grim, the Company has registered positive growth for the 9th Quarter in a row. What is driving this phenomenal growth?
Greaves Cotton Limited is a diversified engineering company and a leading manufacturer of Cleantech Powertrain Solutions (CNG, Petrol and Diesel Engines), Generator sets, Farm equipment, E-Mobility, Aftermarket spares and services. Greaves Cotton is a multi-product and multi-location company with rich legacy and brand trust of over 160 years and has established itself as a key player impacting billion lives every day. As part of its diversification plan, Greaves has expanded its operations into non –auto engines business focusing on Marine, construction and farming industry. High HP Greaves engines have found successful usage in firefighting, cleaning applications as well.
The new Multibrand venture into 2-Wheeler and 3-Wheeler segment has opened new avenues of business with customers wanting reliable and affordable post purchase solutions.
Understanding the need for clean affordable mobility for last mile and riding on the strategy of providing fuel agnostic powertrain solutions and services, Greaves has started the Electric Mobility business. This includes:
Wide range of energy efficient scooters from Ampere electric vehicles for personal mobility,
Rugged, reliable & affordable range of e-rickshaws for commercial mobility.
Lastly the company has invested in expanding footprint via Greaves Retail, creating enriching customer experiences – offline & online and strengthening the value ecosystem for future.
Greaves Cotton operates various business units including engines, power, agri, aftermarket, care and global. How is each one of these businesses doing and which is driving the highest revenues for you?
Greaves has been optimistically cautious about the overall market scenario and expects positive movement banking on our diversification strategy and focus on new business. We have continued our growth momentum despite tough market conditions. Our new business in CNG, E-mobility solutions, Greaves Retail, Multibrand Spares, non-auto industrial applications business along with existing business has shown positive growth. We have been growing consistently each quarter with a focus on driving business opportunities for various sectors. As for Q1 FY20, the company has performed well and grew at four percent. We have a significant increase across our businesses - 41 percent growth in E-Mobility sales further increasing the market share to 18 percent.
Greaves has agreed to increase its stake in Ampere Electric. What prompted this investment and how is it evolving?
This is part of strategic initiative to strengthen and expand presence in last-mile e-Mobility space. Today it is sensible to look at the EV space going forward with the automotive industry evolving at a fast pace and government policies changing. Considering the rise in pollution and importance of sustainable environment for the future, electric vehicles are going to have a major impact. The in-principle decision to acquire 100 percent stake in Ampere is part of Greaves’ long-term growth strategy to deliver superior products and services in last-mile e-Mobility space, which is seeing significant interest from government and commuters alike. Performance has been good; Q1 growth by 41 percent Q-o-Q, 35 new dealers added in Q1 and we have also started expanding channels. We are also enhancing accessibility of affordable finance to allure more customers adopt Ampere electric. We recently launched a high-speed e-scooter Ampere Zeal with subsidies that allow end customers to purchase it at lower costs. Initial response is very encouraging with regards to the product performance, styling and appearance. In addition to this, we have tied-up with one of India’s largest online marketplaces Amazon and with PayTM for customers to experience online and offline shopping at the same time.
Tell us about the overall manufacturing capacities and capabilities of Greaves Cotton.
As mentioned earlier, Greaves Cotton Limited is a diversified engineering company and a leading manufacturer of Cleantech Powertrain Solutions (CNG, Petrol and Diesel Engines), Generator sets, Farm equipment, E-Mobility, Aftermarket spares and services. Greaves Cotton is a multi-product and multi-location company with rich legacy and brand trust of over 160 years and has established itself as a key player impacting billion lives every day. The company has seven manufacturing units and continues to support progress of the nation under Make-In-India program. The company today manufactures world class products and solutions under various business units - Greaves Engines, Greaves Power, Greaves Agri, Greaves Aftermarket, Greaves Care, Greaves Global and is backed by comprehensive support from 325 Greaves big retail Centers & 5000+ smaller spare parts retail outlets across the country.
In the mobility segment, the company manufactures four lakh plus engines annually; almost one engine per minute and provides the most affordable mobility solutions to the majority of population in India, moving more than one crore passengers and five lakh tonnes of cargo every day. In all, the company has crossed five million engines, three million pumpsets and one million gensets. Greaves Cotton augmented its clean technology portfolio with entry in the last mile affordable 2W personal Mobility segment with Ampere Electric Vehicles.
In August 2019, Greaves Cotton Limited (GCL) registered a remarkable growth of 33 percent in the CNG market with its new 400cc water-cooled engine despite the downturn in the automotive markets. What is helping you grow in this segment?
On CNG 3W front, Greaves has been able to carve out a niche for itself with its home-grown, powerful, water-cooled 400cc CNG engines that provide better carrying capacity at much lower costs. Greaves has registered a much faster growth than the industry average due to its well accepted value proposition. With more and more cities getting covered with CNG network, GCL is confident of spreading our value proposition to smaller towns and attaining higher volumes.
Greaves Cotton also has been on a Pan-India retail expansion drive. What’s the strategy behind this initiative?
As one of the leading players in the last mile mobility segment, Greaves has always believed in creating superior ownership experience across the lifecycle of the customer. With this in mind, Greaves has expanded its footprint across the nation, near the customer to ensure quick availability of post purchase solutions – reliable & affordable service and company certified spares. This is to ensure that customers move non-stop and vehicle uptime is high ensuring better productivity & earnings to the owners & drivers.
Apart from 5300+ small aftermarket outlets, the company has opened up 350+ retail outlets with some having full-fledged 3S facility – sales, service & spares, thus strengthening the last mile ecosystem. We are expanding our retail channels both online and offline to leave no stone unturned in this journey towards sustainable living. Now our customers can even buy Ampere Electric scooters on Amazon and Paytm at the convenience of their home.
While the Government has announced a slew of measures to provide a boost to the industry and economy the situation is far from back to normal. What more do you think should be done both by the industry as well as the government to bounce back?
While the Indian government is taking required measures for fostering the adoption of electric vehicles, there is a lot of ground to be covered in terms of awareness, sustainable infrastructure, charging stations and most importantly cost-efficiency for both customers and manufacturers. It will be a gradual transition and it is imperative for auto component manufacturers to start preparing for the ensuing disruption. The government has setup new policies and schemes for the switch to EVs which can surely benefit the industry.
Now there has to be significant adoption from prospective buyers & that will help.
Greaves Cotton has partnered with the Mahindra Group to supply BS-VI emission norms compliant powertrain solutions. How is that partnership evolving?
The partnership is evolving as per the plan. As a part of this partnership, Greaves Cotton Limited will provide affordable last mile mobility solutions through BS-VI powertrain solutions to Mahindra. These powertrains will be used in Mahindra 3 wheelers, which in turn will serve millions of customers and help them save “more with every kilometer” they travel, thereby helping them improve everyday earnings.
What is your vision for Greaves Cotton and where do you see it three years down the line?
Greaves Cotton has been known for its services in the automotive sector so far. However, we are now carefully diversifying into both - automotive and non-automotive industrial sectors such as agriculture, construction etc. thus exploiting the company’s full potential to achieve better business results. This will help us tap into the B2B and B2C segment. Our solutions portfolio not only caters to the industry at large but provides additional value and services to our customers.
“While the Indian government is taking required measures for fostering the adoption of electric vehicles, there is a lot of ground to be covered in terms of awareness, sustainable infrastructure, charging stations and most importantly cost-efficiency for both customers and manufacturers.”