Hero and Ultra Motor Parted Ways

NEW DEHLI, India - UK-based electric vehicle maker Ultra Motor is exiting from its technical collaboration with Hero Exports in India. Ultra Motors would be independently marketing and selling in India, with its first batch of electric scooters, under the company brand, being rolled out in May 2008.

For the expansion it will invest about US$ 35 million over the next three years. The company would now be contract manufacturing its entire range of products with its Hyderabad-based local partner Hindustan Batteries Ltd.

“The opportunity to expand in India is huge. And we want to go independently considering the opportunity cost of sharing the benefits with a joint venture partner,” said Mr Joe Bowman, Chief Executive Officer, Ultra Motor Ltd. He said that despite discontinuing the partnership, the company would offer its service support to the existing customers of Hero Ultra at its dealer showroom.

300 outlets and 20 hyper markets

“All the outlets in which Hero and Ultra had co-invested would become multi-brand outlets housing both our products. And in the case of those dealers who were directly appointed by us, they would become exclusively for Ultra Motors. But we would be present at both the outlets,” said Mr Deba Ghoshal, Director, Marketing, India, Ultra Motor. In the current fiscal, Ultra Motor plans to set up 300 outlets and increase its reach to 20 hyper markets through its distribution agreement with Reliance and Big Bazaar.

Ultra Motor is also planning to bring electric motorcycles that can compete with 100 cc bikes of Hero Honda and Bajaj in the next fiscal. “Currently, our electric motorcycle is at a conceptual stage. But we plan to introduce it in India by the next fiscal. It will be powerful enough to compete with a 100 cc motorcycle or Bajaj Pulsar,” said Mr Bowman.

It is also working on a hybrid-electric three-wheeler for the domestic market by 2010.
Ultra Motors sold 22,000 electric vehicles in India in the fiscal ended in March 2008. For the current fiscal, it has set a target to sell 60,000 hi-and low-speed scooters in India.