Business tycoon Sanjeev Gupta's GFG Alliance, which has been on an acquisitions spree since 2013 including deals in Europe, the U.S. and Australia for steel mills, aluminium smelters, energy producers and auto- components manufacturers, will build EV plants as part of his venture into the auto supply chain worldwide. According to the press statement, the group has committed more than $3 billion to the investments.
GFG Alliance plans to start building Formula 1-inspired electric vehicles in India and Australia early next decade. GFG aims to design the budget, lightweight city cars based on a car model developed by former McLaren Racing and Brabham technical director Gordon Murray.
"We are talking about city cars, about small, light, very, very economic cars," he said in an interview in Sydney. "We will launch both in India and in Australia."
GFG has already been selected as preferred bidder for Indian auto parts maker Amtek Auto Ltd. According to Gupta, through such asset acquisitions in the auto sector, the company is building the foundation for further expansion in the fast growing and highly populous economy.
India has almost doubled sales of EVs in 2017, keeping in view Government’s mission to switch to all-electric cars by 2030. According to Bloomberg New Energy Finance, India accounts for only about 0.1 per cent of total new EV sales. Demand for private passenger EVs is seen increasing from the mid-to-late 2020's as cheaper models enter the market and the nation installs charging infrastructure. Toyota Motor Corp. and Suzuki Motor Corp. are among manufacturers developing plans to begin EV sales in India.
The use of EV in passenger cars and public transport is expected to drive demand for aluminium automotive applications and products like rolling sheet, extrusion and casting products in India.
Gupta, who has relocated to Australia following local deals including the purchase of the steel and iron ore assets and acquisition of mothballed plant or equipment, is utilizing the opportunity created by a dwindling auto industry.
"Launching a car is not a joke, it's a big undertaking," he said in the interview last week. "If we are to do something with an existing plant then it'll be faster." Capital expenditure to enter production may be less than $500 million, "but not much south of that," he said.
Murray's iStream design applies motor-sport principles to reduce the weight of a regular vehicle and claims to cut the cost of an assembly plant by as much as 80 per cent.
Lighter cars will offer better battery range giving opportunity to owners to recharge less frequently, while covering longer distance. The design allows producers to manufacture vehicles in smaller volumes than the sector's dominant players, according to Gupta.
GFG has made a bid for AR Industries, a French manufacturer of aluminium wheels and is constructing an aluminium alloy wheel plan with a two million wheels annual capacity in Scotland, next to the aluminium smelter it bought in Fort William. This indicates a clear cut strategy where Gupta is planning to develop the entire supply chain of the auto industry starting from raw materials (aluminium) to components to the markets.
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