General Motors Co. may scrap a venture to develop an electric compact car in India after partner Reva Electric Car Co. was taken over by Mahindra & Mahindra Ltd.
Mahindra, India’s largest sport-utility vehicle maker, yesterday said it had agreed to acquire a 55 percent stake in closely held Reva as growing environmental concerns spur demand for alternative-energy vehicles. GM tied up with Bangalore-based Reva last year to develop a battery-powered small car.
“It is not at all crucial for GM to have an electric car in India,” said Deepesh Rathore, India managing director of IHS Global Insight Inc. “We are a power-deficient country and don’t have power to light up our homes, so why use electric cars?”
By contrast, buying Reva may help Mahindra expand overseas, he said. Mahindra also bought out partner Renault SA in a carmaking venture last month in a bid to revive slumping sales.
‘Other Options’
Mahindra will buy stock in Reva from the carmaker’s founders and spend about $10 million on new shares, it said in a Bombay Stock Exchange statement. It didn’t give an overall value for the transaction.
Reva’s “endeavor is to maintain all relationships,” Chetan Maini, its chief of technology and strategy, told reporters yesterday in Bangalore at an event to mark the takeover signing. GM had informed the company that it was “looking for other options,” he said.
Mahindra gained 0.3 percent to 517.35 rupees in Mumbai yesterday. The stock has fallen 4.3 percent this year. The carmaker’s Xylo and Scorpio models compete with GM’s Tavera utility vehicle and Captiva SUVs in India.
Reva is offering autos in 24 countries and has sold more than 3,500 vehicles worldwide, according to the statement. The company is building a plant in the southern Indian state of Karnataka to make as many as 30,000 vehicles a year.
The company intends to begin selling the lithium-ion- powered Reva NXR as early as October, Maini said in January. The car will cost about 14,995 euros ($18,500) in Europe, the automaker said last year. The three-door, four-seat hatchback has a top speed of 104 kilometers (65 miles) per hour and a range of 160 kilometers (100 miles) per charge.
Automakers are set to introduce 42 electric models worldwide by 2012, according to an October study by PricewaterhouseCoopers LLP. Nissan Motor Co. plans to sell 500,000 electric cars a year by 2012.
Reva was established in 1994 as a venture between the Maini Group and California-based AEV LLC. The company showed its first electric car in May 2001.
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