In a conversation with Nitisha from EFY, Hyder Ali Khan of Godawari Motors Private Limited, highlights the company’s two- and three-wheeler vehicle categories, along with the roles of dealers and vendors in this business.
Q. What is the business model of Godawari Electric?
A. Godawari Electric, a subsidiary of the HIRA group, was launched in 2019 with a unique leasing model to provide employment. They leased vehicles to unemployed youths for a nominal fee, transferring ownership and returning the deposit after 1000 days, while covering all service and parts costs. The business was significantly impacted by COVID-19. In response, Godawari Motors Private Limited was formed in 2022 to manufacture high-quality, value-for-money two- and three-wheelers. The company launched its three-wheeler in 2023 and its two-wheeler in August 2023. Based in Raipur, Godawari Motors has regional offices nationwide.
Q. Please talk about Godawari Electric’s special product offerings.
A. We currently offer two successful products: the E-autounder the L5 category and the E-loader under L5N. Both have been well-received. We are also preparing to launch an e-rickshaw, for which homologation is complete, and billing will start soon. In our two-wheeler segment, we introduced the Feo, a family scooter designed with top-class comfort, safety, and utility, ideal for families. We recently introduced a new model, the Feo X, which features a detachable battery and a 28-litre storage compartment under the seat.
Q. What unique features does your E-auto model offer?
A. Our company’s three core strengths are high-quality products, top-tier service, and value for money, which we apply across all our offerings. Our E-auto is India’s first vehicle constructed entirely from DCPD panels, a top-grade, virtually unbreakable plastic with an unlimited lifespan. We also lead the electric three-wheeler sector by introducing independent suspension, enhancing vehicle safety by reducing the risk of overturning during turns. Additionally, our E-auto features one of the largest batteries available, a 10.2 kilowatt-hour unit that consistently delivers 130 to 140 miles of range under typical driving conditions nationwide. Coupled with a hydraulic braking system on all three wheels, our E-auto offers unmatched comfort, safety, and value.
Q. What is the price range of these scooters?
A. Our scooter, priced at ₹99,999, offers an exceptional value-for-money proposition compared to others ranging from ₹110,000 to ₹160,000. Designed with families in mind, it prioritises safety, comfort, and utility. It features disc brakes on both wheels, ensuring top-tier stability, which is arguably the best in the industry. Comfort is carefully considered with optimal seat height, handlebar positioning, leg space, and overall vehicle weight. For utility, it boasts a 28-litre boot space and delivers an efficient mileage of 110 kilometres per charge, effectively meeting today’s customer needs.
Q. What factors influence bank financing for vehicle purchases?
A. We have established partnerships with nationalised banks, NBFCs, and local financiers nationwide. When it comes to financing, banks typically consider three key factors. Firstly, they assess the price of the vehicle. Secondly, they look at the warranty terms. We offer a three-year, 80,000-kilometre warranty for autos and a three-year, 30,000-kilometre warranty for scooters, with a five-year
battery warranty for both. Lastly, banks prefer vehicles equipped with tracking devices for monitoring purposes, which we include in all our vehicles. Additionally, it is standard practice to equip three-wheelers with IoT devices.
Q. What are the design and vendor standards?
A. All our vehicles are entirely original designs, created from the ground up. We have not engaged in reverse engineering or copying existing products. Additionally, we exclusively partner with India’s top automobile vendors for our components; we do not rely on tier two or tier three Chinese suppliers. Our leading Indian vendors provide us with essential parts such as powertrains, lighting systems from JC, seats, and brakes.
Q. What is your company’s approach to vehicle assembly?
A. Assembly is entirely conducted in-house. However, like most automobile industries today, we operate on an assetlight business model. We manufacture certain components, such as our body and other parts specifically designed and developed for us. We source from top manufacturers to assemble into our vehicles for other key components like the powertrain, lighting systems, wheels, batteries, and chargers.
Q. What criteria are used to select dealers, and what does the model offer?
A. We have identified five essential criteria for our business partners or dealers. They should have experience in the automobile industry, be service-oriented, possess an understanding and enthusiasm for electric vehicles, be youthful, and have sufficient financial resources to start the business. Our business model offers a comprehensive range under one roof, including two-wheelers, threewheelers, and bicycles. This approach ensures that our dealerships become viable quickly.
Q. How many dealers are currently operational, and what is your target number?
A. Currently, we have 60 operational dealers and about 10 set to begin within the next week, bringing the total to dealers in operation within the next 15 days. Additionally, 20-25 more dealers who have already received their letters of intent (LOI) are securing showrooms and preparing to start operations within a month. Our goal is to have 100 dealers operational by July. Initially focusing on metros and tier A+ cities, our strategy will expand to include tier B and C cities.
Q. How does your company ensure the sustainability and market success of its dealers?
A. Our business partners play a crucial role in our success. They serve as our sales points and provide visibility and service for our vehicles. In exchange, we offer them a comprehensive marketing activity package, including per-vehicle margins and training. We assist them in selling vehicles and regularly introduce new products to excite the market, typically every three to four months. The roles of our company and our dealers are distinct and complementary. For example, in a city like Jabalpur, people recognise Godawari through the dealer rather than the company itself. To support our dealers, we continuously provide high-quality and innovative products and robust marketing support, ensuring their sustainability in the market.
Q. How long and costly is vehicle development?
A. Creating a vehicle from scratch, including conceptualisation, design, thorough testing, and validation, typically spans around two years per vehicle. From the initial stages to launch, it usually takes 18 months to two years, with an approximate cost of 100 million. However, if you opt for reverse engineering, sourcing parts from China or India and assembling them, you can cut the development time to six months with an investment of 10 million. Yet, there will be a noticeable disparity in performance between the fully developed vehicle and the one assembled through reverse engineering.
Q. What are the capabilities and quality control measures at the Raipur assembly unit?
A. Our Raipur assembly unit spans 9290 square metres approximately (100,000 square feet) of operational space. Currently, the company employs 200 people, including 60 staff members and 140 ITI-trained workers who assist in vehicle assembly. Quality control is a paramount concern, and we have invested heavily in quality assurance equipment within the plant. For instance, a dynamometer, costing over 6 million, tests every two-wheeler and three wheeler for energy consumption, braking, acceleration, speed, and overall performance before they are shipped to dealers. Our production capacity is 80 scooters and 30 three-wheelers per day, per shift. This capacity can be doubled within two days by adding shift and tripled by adding two more shifts.
Q. What are the plans for expanding assembly locations?
A. Currently, we operate from a single assembly plant. However, as our business expands and if we find that 25% of our sales volume comes from the South, we plan to establish an assembly unit in Hyderabad or Chennai to minimise transportation costs and expedite product Eblu Feo two-wheeler delivery. Similarly, if there is a significant demand from the North, we would consider setting up a facility in Noida or another suitable location. This is part of our phase two strategy. At present, we are focusing on centralising operations to maintain high quality and control over dispatches and better understand the vehicle’s performance and potential improvements. This setup allows us to identify and address any deficiencies more effectively. However, next year, we may reassess and potentially open one or two more assembly units based on market demands.
Q. What are the sales figures and expansion plans?
A. Initially, we conducted a three-month software test run with 100 vehicles before starting deliveries, building confidence in our product. As of March 31st, we have sold between 480 and 500 three-wheelers and approximately 800 two-wheelers over three months. With confirmed customer satisfaction and product performance, we began expanding our distribution network in April.
Q. What are your sales targets for scooters and threewheelers this year?
We aim to sell approximately 24,000 scooters and 4,000 three-wheelers in 2024. Starting this year, we have set targets for developing and testing these products.
Q. Are you seeking any vendors or partners for your business?
A. As our business grows, we have one vendor for a part. As we grow, we would ideally look for two vendors now or the same part because if there is a problem with one vendor, the whole business should not come to a full stop. So, the process we will start in the next two months is adding one more vendor to the parts, which is the normal evolving process.
Q. How many vendors do you have for each vehicle?
A. We work with around 200 vendors for three-wheelers and two-wheelers, and we have collaborated with approximately 120 vendors.
Q. Why are you planning to add additional vendors?
A. We currently have one vendor per part. Ideally, we want two vendors for each part to prevent business interruptions if one vendor faces issues. In the next two months, we will add additional vendors for each part, which is a normal part of our evolution process.
Q. What are the primary revenue channels for your business?
A. Our primary revenue comes from the margin on the vehicles, which is typically 12-15%. Additionally, we engage in extensive value engineering to reduce costs by removing and adding parts as needed. Revenue also comes from selling the product and spare parts. These are our main revenue channels.
Q. How do electric scooters impact monthly savings and livelihoods?
A. All scooter manufacturers, including their owners, are our target audience. If someone uses a petrol scooter for 50 kilometres daily, switching to an electric scooter could save them approximately 6000 rupees monthly in fuel costs. For a middle-class individual, this saving of 7000 rupees holds significant value. This translates to substantial profit or livelihood for auto drivers. For instance, while a CNG auto driver earns around 700 rupees daily, an EV auto driver might earn approximately 900.
Q. Do you organise any workshops or training programmes?
A. We collaborate with numerous colleges on our testing processes and development initiatives. These colleges assist us in integrating motors and controllers to enhance the vehicle’s weight management. We have a well-organised summer internship programme with engineering colleges involving 40 to 50 engineers working with us on various projects.
Q. What are the main challenges in the EV market?
A. The EV market presents numerous challenges due to its dynamic nature and evolving regulatory landscape. Constant product improvement is necessary to keep up with changing demands and regulations. Establishing brand identity is another hurdle, especially for new companies entering the market. Despite offering competitive products, building trust and connection with consumers can be difficult compared to established brands like Sony or LG. Additionally, securing retail finance has been a common issue for many companies in the EV sector, but we have made significant progress by partnering with nationalised banks, NBFCs, and local financiers.
Q. What are your plans for vehicle launches?
A. We have launched two models in the scooter segment and plan more. By August, we will introduce a youthful scooter with a more powerful motor, higher speed, larger battery, and additional features. By the end of the financial year, we aim to unveil a motorcycle tailored for middle-class families. We are developing an eco-model for the L5 segment in the three-wheeler category, priced lower than current offerings. While we are focused on expanding our two-wheeler range, the concept of a fourwheeler, akin to a loader, may materialise in the next two years.
