Lohia Auto eyes Andhra Pradesh, Telangana for Rs 1-billion facility

Lohia Auto Industries, the automobile division of Lohia Global worth Rs 7 billion, is planning to start a facility in southern India. 

Lohia Auto CEO Ayush Lohia said the company is scouting various sites in Andhra Pradesh and Telangana to set up the facility. 

The company would require around 50-75 acres of land for the project that could attract an investment worth Rs 1 billion, he said.

If Lohia decides to set up a facility in Andhra Pradesh, it will join auto brands Kia, Hero, Isuzu and several others. Dozens of auto-component makers are also investing billions of dollars in the Andhra Pradesh.

Lohia's new plant would have a capacity of around 100,000 units and can be scaled up to 300,000 units in three years. The entire product portfolio of EVs, motorcycles and gasoline vehicles would be produced in the facility for both domestic and foreign markets.

"We are open to all avenues, but nothing has been finalised yet in terms of funding," said Lohia.

The new plant would not only help the company cut logistics costs but also bring it closer to the southern market, which contributes around 40 per cent of its sales. It would also help the company cater to foreign markets, mainly the African region. The plant is likely to be ready by 2020-21.

The new plant would roll out both electric and diesel products. 

Lohia Auto manufactures a range of two- and three- wheelers from its Kashipur-based unit in Uttarakhand that has a capacity of 100,000 units a year.  The vehicle manufacturer exports the gasoline-run three-wheeler Humsafar DLXP to Nepal and Bangladesh. 

While the company is bullish about electric vehicles, Lohia said challenges, including cost, infrastructure and awareness, needed to be addressed. Lohia plans to roll out vehicles on alternate technologies including CNG, gasoline and others. 

"Lots of players have come in and vanished in the electric vehicle space. We don't want to be a fly-by-night operator, so we will continue to give thrust to EVs," said Lohia, who is targetting around Rs 5 billion in revenues in the next two years. However, he declined to share the current revenue figures. 

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel