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Monto Motors (Avanti) to marry Peugeot to produce mobikes

Byas Anand in New Delhi

Close on the heels of finalising a scooter venture with Hero Motors, the Peugeot group of France is now working towards setting up a joint venture company with Monto Motors Limited, owners of the resurgent Avanti brandname, to produce its range of four-stroke motorcycles in India.

Talks have been initiated between Monto Motors and Peugeot and a 125cc bike, sporting a price tag of about Rs 35,000, has been finalised as the launch vehicle from the new company, sources close to the deal said.

''The structure of the JV and equity distribution is currently being finalised. Peugeot officials had visited Monto Motors' facility in Alwar, Rajasthan last week and talks are advancing at a good pace,'' the sources added.

Although the partners have decided to roll out a range of bikes in the 125cc power category, the final models are in the process of being finalised.

The JV with Peugeot, the sources said, is a logical graduation for the company which has hitherto been engaged in the manufacturing of mopeds. ''Monto Motors have till date been an active player in the moped market with its three models -- Avanti Kobra, Avanti Mont and Avanti Carrier. We, however, do not want to remain confined to this slow growth segment and so are entering the hotly contested four-stroke motorcycle segment.''

The JV project is expected to be finalised by 1999-end. Although the modalities are yet to be finalised, the sources said, ''They (Peugeot) will give us engines and all technology and in the shape of equity, we might offer our land. The details are yet to be worked out and the motorcycle venture will come online in about nine months.''

This venture would also mean a rebirth for the company and a second coming for Peugeot. Having aborted a car venture with the Bombay-based Premier Automobiles Limited, Peugeot is now planning to re-enter India albeit through the bi-wheeler route. It has also formalised a JV with the Hero group for producing its range of premium scooters.

''There will be two separate joint ventures -- one for scooters and another for motorcycles,'' the sources said.

The company, the sources said, is now aggressively working towards setting up the JV with Peugeot.

The sources further pointed out that Monto Motors had initially considered its original technology provider Agretti Garelli for the venture. ''But the high prices of its models and certain other factors forced us to decide against Agretti Garelli.

Meanwhile, back home in France, Peugeot is engaged in the business of manufacturing a range of automobiles, beginning from bicycles, scooters, motorcycles to cars, all-purpose vehicles and vans. Peugeot produces its range of bikes through Peugeot Motorcycles, which is a subsidiary of the parent PSA group and is independent of Automobiles Peugeot.

Avanti was, till recently, consigned to the scrap heap of India's automobile industry. The Avanti saga started as an ill-conceived expansion of the refrigerator major Kelvinator. Later, when Kelvinator later sold off its unit to Whirlpool, automobiles not being the latter's main line of business, was sold off to Pacco group for Rs 90 million.

Pacco injected new life into their newly acquired moped manufacturing facility and renamed it as Monto Motors. They also hired a new management team, basically consisting of people from Hero Motors.

The company has now drawn up an ambitious expansion plan, which includes a three-wheeler, a mini-motorbike for the US market, a renewed thrust on the export markets, besides the JV with Peugeot.

The company has already started moving on its growth track with a phased relaunch of its mopeds in Tamil Nadu.

Meanwhile, Monto Motors has also initiated the process of strengthening its dealer network. The company plans to add at least 100 more dealers to its existing 150 nationwide dealers.

UNI

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