Japan hands Reva $2,600 welcome note

Reva Electric Car Company has secured a $2,600 subsidy per car from the government of Japan. Following this, the company is demonstrating its electric variants in select cities of Japan and hopes to ship out cars to Japan in the next two months.

This type of subsidy is similar to the one obtained from the UK government. In UK the Reva has firm orders for the supply of 500 cars, the subsidy offered to customers stands at 1,000 pound sterling.

Chetan Kumaar Maini, deputy chairman and CTO Reva Electric Car Company said, "In the short term export markets will be crucial. But in the longer run the brand image gained from overseas exports will hold it in good stead in the changing Indian market."

He added that the subsidy gained from Japan is apart from the tax concessions for non-polluting variants.

The foray into Japan will test the Reva, as Japan did dabble with electric variants before giving up because of high prices. Reva will be priced in line with small and mid-sized car in Japan between 1.29 million yen (standard model) and 1.49 million yen (higher-end version).

Also, this will more or less be on a par with Reva's pricing in UK, but significantly higher than the Indian price at about Rs 3.22 lakh.. In UK, Reva is billed at 6,000 pound sterling.

The company has already appointed a distributor who has a dealer base of around 35 across Japan.

To start with, Reva will be offered in selected cities and based on the response extended to other areas. Chetan Maini said that, to increase capacity utilisation, orders from overseas market will matter. Reva has a 6,000 car annual capacity. Besides a few hundred units exported to UK, the company has put on Indian roads under 900 vehicles since its inception.

Apart from interesting the general crowd in Japan, the company expects to benefit from the government regulation. The regulation mandates 10 per cent of all government vehicles should be electric variant by 2005.

The success in Japan will boost the brand image of Reva globally. Added to it, the company is working out a branding/promotional strategy, which it expects to unveil next year.

Also market acceptance will assist the company access much needed global funding.

The company for quite some time now has been negotiating a $15 million private equity funding. Chetan Maini hopes to conclude this within the next couple of months.