Ather eyes higher sales, to double production by Mar

Electric two-wheeler makers in India are looking to increase sales, and grow their distribution networks, on the back of easing supply chain pressures.

Ather Energy, one of India’s largest e-scooter manufacturers, is pursuing an aggressive retail strategy by expanding its distribution centres pan-India. It is also planning to more than double its capacity to 20,000 units a month by March from the existing 8,000-9,000 units, said Ather chief executive officer Tarun Mehta. It has also tweaked its strategy, and is focussing on opening showrooms in the outskirts of cities and gradually moving to more affluent urban neighbourhoods, in a reversal to its initial policy.

“We are looking to ramp up to 15,000 scooters a month by January, and we’ll start doing closer to 20,000 units by the end of this financial year,” said Mehta. “Our big focus is now on opening up distribution. For a while, we were tentative on distribution because supply was painfully for nine months. We did not want to have more dealers till we had the supplies to cater to the demand.”

Ather inaugurated its second manufacturing facility in Hosur in October. Mehta is uncompromising on profitability even as rivals launched low-cost products to gain market share. “We would not sell at a loss. I am unwilling to lose money at the unit level, and sell at negative gross margin,” he added.

With a manufacturing ramp up, the company is looking to drive sales by wooing buyers, and opening 10-11 new dealerships every month. “We are seeing demand growing with each experience centre we are opening,” he added. Backed by Hero MotoCorp., Ather Energy is organizing a Community Day in January to announce product updates and engage with customers to drive sales.

Rival Ola Electric recently conducted a retail event called Ola Hyper Sunday, where customers were offered cash discounts of ₹2,000- ₹4,000 in addition to the ₹10,000 festive discount it was offering.

Despite growing concerns over the government’s FAME-II subsidy scheme coming to an end in 2024 Ather is confident of growing its business. “We are pricing ourselves for it (when subsidies end). When we launch a low-cost product, it will be a new vehicle, not a discounted variant of the same product we sell at a price point right now.”

“If 12-13% of all scooter buyers buy an electric product, it means 25% are considering an electric seriously. They aren’t buying as there are no stores of a brand they want or the waiting period is a bit too much or lack of product variants available right now,” he said.

“So, a quarter of the scooter market is ready to buy electric today & I’m very bullish about that. Individual market shares will swivel for a while. I think we’re still probably two years away from market shares stabilizing”, he concluded.