Expansion of Electric Vehicles in India: Alcraft Motors Case Study

Desklib provides past papers and solved assignments. This case study analyzes Alcraft Motors' expansion in India's EV market.

“EXPANSION OF ELECTRICAL
VEHICLES IN INDIA, CASE STUDY OF
ALCRAFT MOTOR COMPANY”

TABLE OF CONTENTS
EXECUTIVE SUMMARY............................................................................................................. 3
INTRODUCTION........................................................................................................................4
RESEARCH BACKGROUND.................................................................................................... 4
RESEARCH PROBLEM............................................................................................................5
RESEARCH QUESTION...............................................................................................................6
RESEARCH AIMS AND OBJECTIVES...........................................................................................6
RESEARCH METHODOLOGY......................................................................................................7
SAMPLING AND LIMITATIONS..............................................................................................8
ETHICAL CONSIDERATION.................................................................................................... 9
SECONDARY RESEARCH..........................................................................................................10
PRIMARY RESEARCH DESIGN..................................................................................................12
QUESTIONNAIRE SURVEY...................................................................................................12
INTERVIEW QUESTIONS......................................................................................................13
RESEARCH FINDINGS.............................................................................................................. 14
RESEARCH ANALYSIS.............................................................................................................. 22
CONCLUSION AND RECOMMENDATIONS..............................................................................23
REFERENCES........................................................................................................................... 24

EXECUTIVE SUMMARY
This research study aims to gain an overview of the Indian market in term of the electric-
hybrid eco-friendly vehicle, the market demand and current competitor along with
favourability of political and environmental policies and regulation. The electric vehicle
segment has gained momentum worldwide in recent years with record sale in the year
2017. The British car company Alcraft Motors have an ambitious plan for expansion and they
want to establish their market in world’s fastest developing country like India. The research
study has conducted analysis on external elements that may affect the company's plan,
especially it government policies regarding the electric vehicle and the need for
infrastructure development in India for an electric vehicle. India is one of the world's biggest
markets for commercial vehicles and many multinational automobile giants have
successfully established their businesses in India (Majumdar, et al., 2018). Alcraft Motors is
expected to face challenges from local companies mainly and then some other big foreign
companies which possess a good share of the market in India in commercial vehicles
segment. India is a member of a multinational organisation called Electric Vehicles Initiative
(EVI), established in 2009 to deploy and accelerate the demand and supply of electric
vehicles worldwide and create a common ground with the help of policymakers and
stakeholders for all the manufacturers to encourage them to bring electric and hybrid
vehicles in their portfolio (Vidhi and Shrivastava, 2018).

INTRODUCTION
RESEARCH BACKGROUND
Electric vehicles also are known as Traction Motor vehicles are the result of an efficient
environmental approach to the developing concerns regarding limited fossil fuels and their
impact on the environment (Mi and Masrur, 2017). Sheppard, et al., 2016 says demands of
electric vehicles are increasing worldwide, not with the required pace, however, but the
unavailability and their technical inefficiency in developed countries like India and China is
the main reason for their unexpected demand. These countries have some of the world’s
most polluted cities and their enormous population and rapid consumption of fossil fuels cry
for the entry of electric vehicles in public and personal transport segment (Venugopal,
2017). The basis of this research study is also based on the fact that, the problem or
concerns which gave birth to the conception of electric vehicles in the first place are also
valid form perspective of India and similar countries. The research study, however, has kept
limited to the investigation of possibilities of electric vehicles in India. In the journey of
nearly 120 years, electric cars have introduced and reintroduced many times with their new
technology different concepts. In recent years, the worldwide picture of electric vehicles is
witnessing significantly fast changes. The momentum of demand for electric vehicles is
rapidly increasing (Government Publications Office ed., 2016). In contrast, it is the right time
for new and mature companies in this segment, to expand and flourish in the light of global
connectivity and continuously developing global market.

RESEARCH PROBLEM
The problem around the research study is quite simple, the need of electric vehicle is not
just another marketing proposal but it is born of serious environmental concerns and
continuously increasing the price of fuel in the international market. India has been
considered as a big and growing market that cannot be ignored by the world's leading
multinational companies. The demand and supply ratio is still unmatched to its expectations
and requirements (Mi and Masrur, 2017)s. In terms of electric vehicles, India has shown a
strong promise and with its current policies and schemes to encourage the use of renewable
energy sources and electric vehicle segment, the market possibilities are staggering
(Tripathi, et al., 2016). This demand however has not been a secret and all of the world’s
leading car companies and electric vehicle component manufacturer are drawn towards the
Indian market. In no time, as the effect of such involvement can already be seen, the market
will be flooded with different electric vehicle companies. Because of the complexity of the
Indian market and in light of its unstable government, this change could take some time
(Abhyankar, et al., 2017). Alcraft Motor Company a British electric car manufacturer also
wants to take advantage of the current market situation in India and wants to launch their
series of electric vehicles in India. Alcraft motors have recently launched their new electric
vehicle and have managed to gain quite market hype about it.
Electric vehicles for common public transportation are already in regulation and use in India
with a decent amount of vehicle on road, the electric cars, however as a means of personal
transport, is not at all available in the market at a commercial level (Venugopal, 2017). One
may see 5 or 10 electric cars in thousands but there's a long road to walk in this segment.
The challenge is bringing electric cars which are affordable to India middle-class people and
also there is a need of infrastructure for electric cars like maintenance points, charging
points etc.

RESEARCH QUESTION
What are the current opportunities and challenges for expanding electric vehicle in India for
Alcraft Motor Company?
RESEARCH AIMS AND OBJECTIVES
The main aim of this research is to identify the expansion opportunities for the Alcraft motor
company in the Indian market to successfully launch its electric vehicles in the country. In
order to achieve this aim the following objectives are set:
 To analyse the current status of the electric vehicle market in India.
 To identify the main competitors of the company in the Indian market.
 To determine the current infrastructure facilities for an electric vehicle in India.
 To analyse the customer's interest and willingness to purchase an electric vehicle.

RESEARCH METHODOLOGY
The way a researches approaches research questions or problem summary and deconstruct
it to get the basic elements of analysis is a procedure that comes under research
methodology. These approaches may be qualitative or quantitative but as it has been
noticed in a number of research studies that a dedicated approach of neither of them has
proved effective.
Research methodology for this research study would be basic and forward. In the sequence,
first, the focus has been kept at the analysis of market demand which can be done with the
study of data and statistics regarding sells and annual reports of currently present
companies in India market in electric vehicle segment (Venugopal, 2017). The next
procedure may be the analysis of external market agents such as political conditions, their
rules and regulation for electric vehicles in the country also what kind of benefits are they
providing to foreign companies who wish to sell their electric cars in India. Other external
elements may be the study of company's economic background, in that, an overview on
how much and why an India customer is expected to expand on such personal transport
facilities also, analysis on what market says about future growth and demand in the
concerned segment. There is also an environmental concern regarding any new industries
especially the ones use some sort of fuel, however, this element may not influence Alcraft
motors as others but still, if they plan to establish a manufacturing unit, it may be a point of
concern (Digalwar and Giridhar, 2015). All of such external concerns can be studied under
the structure of Porter’s five forces model.
Some of the elements which may come out as a challenge could be a chain of the
distributorship, as the electric vehicle may need a completely different structure in that, also
the necessary infrastructure that will be needed to establish before market sell, regarding
servicing, maintenance and public charging stations for company’s electric cars. In the light
of the number of elements that may have to study, the approach or the methodology of this
research study has kept hybrid in which both the qualitative and qualitative methods are
utilised in a proportionate manner.

SAMPLING AND LIMITATIONS
The process of sampling research process involves taking an area of population with
required elements of research in it and establishing factors on which such sample areas
could be selected. The sampling process obviously depends on the type of research
approach that is being utilised to the study. So the basic sampling processes are quantitative
sampling, in which as large quantity of projected entity is taken for research purpose, the
other one is Random sampling which is conventional and widely used in most of the
research study and the third one is convenience and purposive sampling which are non-
random sampling methods. This research study has the aim to analyse the market
conditions for electric cars in India from the perspective of a foreign car manufacturing
company which is, in this case, are Alcraft motors. Obviously, the company would want to
launch its cars in the part of the country where it could get decent sell. In India that would
be the capital city of it called New Delhi. It is the world’s third largest populated city and has
among the highest number of cars to people ratio in India. New Delhi has a very large
market demand for such a vehicle as it is also one of the world's most polluted cities. The
state government has issued many regulations schemes to reduce the number of vehicles
on road to reduce pollution (Vidhi and Shrivastava, 2018).
Fernandez, et al., 2016 says that the limitation of conduct would be mainly from the side of
infrastructure and pricing strategy of the company regarding its vehicles. Electric cars as a
personal transport is a big change from Indian perspective so there will be market inertia for
this change which could appear as a major shortfall for the company. Also, the company
would face local competition from companies such as Tata, Maruti and Mahindra and there
are other multinational electric cars manufacturers are also in line. Companies such as Ford,
Volkswagen, General Motors and some of the major Japanese automobile companies have
also planned to launch their electric vehicles in the country's market (Abhyankar, et al.,
2017). Alcraft Motors may have to fight a serious competition in the Indian market with
these companies and the only arrow they will have in their hold is quality and pricing to
create a growth environment.

ETHICAL CONSIDERATION
This research study is conducted on the genuine standard of research activities and all the
data and statistic figures used in the study are well referenced and documented with
credible and official sources. The sampling errors are kept at a minimum with the utilisation
of most efficient techniques and calculation tools and methods. All the data confidentiality
and copyright issues are well-considered and there is ample mention and references have
been provided. The focus of the study is to find out the market status of India on electric
vehicles and their possible future demand and the data regarding automobile and
transportation sector as in demand and supply has been taken from official government
sources, also the view of experts in the same consideration has also taken from credible
news sources and articles which are duly mentioned in this report.

SECONDARY RESEARCH
LITERATURE REVIEW
The India market of the electric vehicle is continuously gaining momentum because of the
new government’s ambitious plans and initiatives for the growth of India’s renewable
energy resource and related industries. According to Dilawar and Giridhar, 2015 there are
many policies and regulations have been made in this field by the public authorities of the
countries in light of the rapidly growing market in the segment. The National Electric
Mobility Mission Plan (NEMMP) 2020, established in 2012 was aimed to promote electric
and hybrid vehicles in the country.
Gujarathi, et al., 2018 says the effect is not limited to India only and rapid expansion in the
electric vehicle market can also be seen at the global level. The number of electric cars sold
in the year 2017 alone was about 1 million which is about 54% growth from its previous year
and the total number of units of electric cars has reached three million globally.
Considering the current market competition for Alcraft motors in India, the government’s
fleet of electric and hybrid vehicle have the Tata Tigor EV And the Mahindra e-Verito and
both these companies has successfully delivered to the government their first fleet of
electric vehicles as part of initiative by Energy Efficiency Services Limited (EESL) to procure
10,000 electric and hybrid vehicles in 2017. Many of other automobile manufacturers are
also initiating their E vehicle sector and working in collaboration and forming joint ventures
toward introducing electric vehicles in their market portfolio. Maruti Suzuki and Hyundai
have confirmed that they will launch their first electric vehicle in India by 2020 and 2019
respectively.
According to the data from National Electric Mobility Programme, a government scheme,
the program is working on developing infrastructure for electric vehicles throughout the
country as discussed earlier and the aim is to make country on 30% electric vehicle by the
year 2030. Energy Efficiency Services Limited (EESL), another government authority working
in the same direction and in the year 2017 it had proposed contracts to procure 10,000 units
of electric vehicles and in the sequence, in March 2018, it issued a new tender for similar
procurement of another 10,000 under the FAME scheme. The FAME India is another
ambitious scheme of Indian government (Faster Adoption and Manufacture of Electric

Vehicles). It was launched in 2015 by the Ministry of Heavy Industries (MHI) and Public
Enterprises to provide incentives and encouragement to the production and promotion of
electric and hybrid eco-friendly vehicles. According to Tojo Josh, editor of
Indianeconomy.net, FAME has its main focus on four elements of electric and hybrid vehicle
environment development, i.e., Technology development, Charging Infrastructure, Demand
Creation and Pilot Projects. From the data gathered from the official website of National
Automotive Board, Govt. of India, about 3.1 Billion INR has been distributed as an incentive
to such manufacturing companies under FAME scheme. A total number of 263619 electric
vehicles have been sold till now under the scheme.
The two major forces behind the need and demand for electric vehicles are the
environmental concerns with conventional fuel consuming vehicle and increasing carbon
emission and another force it that the fuel that is being used for almost every power and
transport applications is limited and according to a report the currently exploited oil
deposits will last till the year 2052 with current speed of consumption (Government
Publications Office ed., 2016). The environmental impact is getting severe with every day
and countries like India and China are under the most drastic conditions in this matter (Dhar
and Shukla, 2015). Nonetheless, the development of renewable energy resources is also
gaining speed and many countries have come forward in this matter to share their
knowledge and resources for planet's sake. This research study however focuses on traction
motor vehicle which runs on batteries. One of the reasons these electric vehicles are still
struggling in the market and why it took them so long to realize their need is the technology
used in them. de Hoog, et al., 2016 says that it is very complex and inefficient and batteries
have limited power and they dry out fast when used at high performance. Many solutions
have been proposed however in this regard by companies such as Tesla and BMW research
and development units. But still the technology is not quite available for the small
manufacturer and this is the main reason that this sector is not growing with the speed it
should.

PRIMARY RESEARCH DESIGN
QUESTIONNAIRE SURVEY
The questionnaire survey will support in analysing the customer preference and interest
towards the electric vehicle in the Indian market to determine whether it will be profitable
to enter in the Indian market or not. The survey will be performed among the customers at
a car showroom in a metro city of India to gain a better understanding of their interest and
preferences in Electric Vehicles. The questionnaire survey will be consisting of 6 questions
with a sample size of 50.
 What is your age?
o Below 20
o Between 20-40
o Above 40
 Did you know about electric?
o Yes
o No
 Are you interested in purchasing an electric car?
o Yes
o No
o Not sure
 What you prefer the most an electric car or a fuel car?
o Electric Car
o Fuel Car
 According to you, what is the main factor that could support the purchase of an
electric car in the country?
o Infrastructure facilities
o Cost of the Vehicle
o Quality of the Vehicle
 Does the quality and services of the existing electric car manufacturers in the
country is Good?
o Yes
o No