A UK-based maker of electric two-and three-wheelers Ultra Motor Co. said it was aborting a proposed joint venture with the Hero group, which co-owns Hero Honda Motors Ltd, the country’s largest two-wheeler maker, to make scooters because it’s unwilling to share profits.
Ultra has hired a contract manufacturer in Hyderabad to make its two-wheelers and plans to invest Rs150 crore this financial year in beefing up its supply and distribution network.
“We decided to go it alone as we reached a point in negotiations where the walkaway price was too high,” said Joe Bowman, chief executive officer of the company.
“We didn’t want to share any profits. We want to go alone globally.”
Ultra Motors and Hero Exports Ltd had a joint marketing pact and the vehicles were contract manufactured in the Ludhiana, Punjab factory of Hero Cycles Ltd, one of the largest bicycle makers in the country.
The two companies had announced in October 2007 that they intended to form a joint venture. Senior officials from the company refused to comment and Naveen Munjal, who headed the project from the Hero group, didn’t respond to phone messages.
Bowman said the company would introduce three new products in May and another one in the third quarter of this fiscal to boost sales to 60,000 units a year compared with 22,000 units in FY08.
Currently, the firm sells two products—the Velociti and the Marathon. The contract manufacturer can produce up to 120,000 vehicles a year. Electric two-wheelers entered the Indian market only two years ago as manufacturers such as Yo Bykes and Electrotherm (India) Ltd started selling electric scooters in India.
Over one lakh electric scooters were sold in India last year and consultancy firm AC Nielsen estimates that will grow to 2.5 lakh units a year at the end of fiscal 2009, based on cheaper running costs of the vehicles and rising price of crude oil.
Electric vehicles claim running costs of 10 paise per km compared with 90 paise per km for scooters that are powered by petrol.
First step: IT investment regions get cabinet nod
The cabinet committee on economic affairs has approved the creation of information technology investment regions or ITIRs that are designed to be dedicated electronics clusters as part of India’s strategy to attract tech hardware manufacturing investment into the country.
“These ITIRs will be similar to special economic zones or SEZs, but will instead be solely dedicated for manufacturing of IT, software and hardware industries. They will have residential facilities as well as institutions of learning such as IITs,” said a government official who did not want to be named.
‘Mint’ had reported on 20 December that India was readying a hardware policy that would not only bring companies relief in taxes such as excise duty and value-added tax, but also create top notch infrastructure.
According to a government statement, each ITIR will have a minimum area of 40 sq. km and the minimum processing area will be 40% of the total area of the ITIR. The ITIRs will be developed in a phased manner.
While state governments would ensure all physical infrastructure and utilities are provided, the Centre will facilitate development of national highways, airports and rail links.
“The announcement of ITIRs is one part of the hardware policy, the first in terms of infrastructure,” the official added. Last November, the IT ministry had announced the ‘Support International Patent Protection in Electronics and IT (SIP-EIT)’, whereby small and medium enterprises and start-ups in this domain would be reimbursed costs incurred in filing international patent applications for their inventions. Regina Anthony
IIM-A explains why it needs to hike fees
Ahmedabad: Rising costs and the need to make good the Sixth Pay Commission proposals is forcing Indian Institute of Management, Ahmedabad to raise fees substantially for the two-year post graduate programme (PGP) from the current Rs2.2 lakh to Rs5.5 lakh for the first year and Rs6 lakh for second year. Earlier the two-year course cost Rs4.5 lakh.
Though the fee hike announcement was made on 29 March, IIM-A director Samir Barua explained at a press conference on Thursday that the reason behind the move was the fact that the institution was having to eat into its reserves to meet expenses. “Our corpus has gone below Rs50 crore and liability arising out of pension payment due to the sixth pay commission is going to hit IIM-A hard. And if you consider inflation and other costs rise, the total cost to the institute per student of PGP every year comes to Rs 5.5 lakh,” he explained.
The institution is hoping to soften the impact of the hike by revising the criteria for those who can afford to pay, those who need assistance and by introducing a graded waiver of tuitution fee which it claims will benefit more than 65% of the incoming students, based on the income distribution pattern of students who qualified for admissions after Common Admission Test (CAT) last year. Other IIMs, namely Bangalore, Kolkata and Kozhikode have also decided to raise their fees, a move the IITs are now proposing to follow. Sunil Raghu
Accounting technician course to be introduced
New Delhi: The central council of the Institute of Chartered Accountants of India or ICAI is planning to introduce an accounting technician course that will enable a student clearing Class XII boards to appear for an eligibility test.
Awaiting government clearance, the course will combine training in the area of accountancy and information technology for a minimum of nine months and practical work experience and orientation programme for a year.
“After successful completion of studies and IT training, students can appear for a written test anytime after nine months of registration. And after practical training and orientation programme, the candidate will be offered the Accounting Technician Certificate,” said ICAI president Ved Jain at a press conference on Thursday. Sangeeta Singh
Jha new chief of Central excise, customs board
New Delhi:P.C.Jha has taken over as chairman, Central Board of Excise and Customs (CBEC) effective 1 April, a statement issued by the finance ministry said. The CBEC oversees the collection of federal indirect taxes such as customs and excise duties and service tax. Sanjiv Shankaran