Scooters India, maker of the Vijai Super brands, is showing signs that all is not lost with the company.
Steadily declining from its heydays in the 1970s and 1980s, when its scooters had a significant presence on Indian roads - the government had gifted each member of the team that won the 1983 cricket World Cup a Vijai Super - the Lucknow-based Scooters India was referred to the Board for Industrial and Financial Reconstruction (BIFR) in 1996.
Battling labour disputes, lack of business foresight and official apathy, the Union Cabinet finally on May 19, 2011, cleared a proposal to divest 95 per cent of the central government's stake in the beleaguered company. The proposal was, however, put on the back burner over opposition from its 1,100 employees-on the rolls and on contract-and the Centre announced a revival package of Rs 202 crore. Scooters India now manufactures the Vikram brand of three-wheelers in different variants.
Told to put its house in order, Scooters India reported an operational profit of Rs 6.7 crore in 2014-15, its second year of profits, although turnover dipped from Rs 194 crore to Rs 167 crore on declining sales. It sold 11,409 vehicles in 2014-15 against 13,877 the previous year, an 18 per cent decline.
Scooters India can make 3,000 three-wheelers a month but it works far below this capacity. The company achieved operational profits by reducing the weight of its vehicles and lowering energy costs at its plant.
It is now looking at sustained production, a two per cent decrease in cost, and inducting manpower. Scooters India exports to Germany, Italy, Sudan, Nigeria, Nepal and Bangladesh. However, there were no exports during 2014-15.
Incorporated in 1972, Scooters India's plant owes its origin to Innocenti of Italy, from which it bought over the plant and machinery, design and copyright. The company has an integrated plant spread over 150 acres, with another 200 acres for residential blocks. The leased land belongs to the Uttar Pradesh government. In 1975, Scooters India started production of the Vijai Super and Lambretta for the local and foreign markets, respectively. Later, it introduced three-wheelers under the brand Vikram, which is still popular in this region. In 1997, the company discontinued scooter production to concentrate on Vikram. However, the company lost its way due to lack of innovation, product diversification and a placid business leadership.
At its 43th Annual General Meeting (AGM) here recently, Scooters India Chairman and Managing Director Rajesh Kumar Singh said BIFR had considered discharging the company because its net worth had turned positive on March 31, 2014. Five years ago, Scooters India was estimated to be worth Rs 850 crore. Some years ago, the Rajkot-based Atul Auto had expressed an interest in buying the controlling stake in Scooters India and its representatives had met the then heavy industries minister Vilasrao Deshmukh.
Going forward, Scooters India is looking at tapping markets in the southern, western and eastern parts of the country, apart from exports. However, the government's promotion of e-rickshaws and a rapidly growing market for small commercial vehicles threaten the Vikram brand.
YESTERDAY ONCE MORE
- Incorporated in 1972, Scooters India's brought over the plant, machinery, design and copyright from Innocenti of Italy
- In 1975, started production of the Vijai Super. Later introduced three-wheelers under the Vikram brand
- In 1997, the company discontinued scooter production to concentrate on Vikram
- The company lost its way due to lack of innovation, product diversification and a placid business leadership
- On May 19, 2011, Cabinet cleared a proposal to divest 95 per cent of the central government's stake in the company, which the employees objected to
- Later, the Centre announced a revival package of Rs 202 crore
- BIFR considered discharging the company because its net worth had turned positive on March 31, 2014
- In 2014-15, made an operational profit of Rs 6.7 crore
