Mahindra & Mahindra has acquired a 55.2% stake in Bangalore based Reva Electric Car Co. Ltd, which will now be known as Mahindra Reva Electric Vehicle Co. Ltd. M&M had earlier taken the initiative for ‘Sustainable-Mobility’, as it had been promoting green technologies by providing cars like the diesel hybrid Scorpio, hydrogen Alfa three-wheelers et al; the Reva acquisition evidently comes close on their heels. But globally, electric cars haven’t made the kind of business sense that their initial promise had showed – even Reva underwent these issues. Then what’s the logic in M&M taking Reva’s stake? M&M’s takeover move has been made due to a wider perspective – and that is backward integration. Reva’s electric technology will now be adapted into M&M vehicles. M&M has also been working on an electric version of its Maxximo mini truck. But the takeover springs up a few issues. In September 2009, Reva and GM signed a partnership to produce an electric version of the new Chevrolet Spark in India. Would this partnership undergo any changes post this takeover? If that happens, it would be ‘electrifying’, to say the least.
Vineet Singh
For more articles, Click on IIPM Article.Source : IIPM Editorial, 2010.
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
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