The Indian two-wheeler market—which is moving briskly towards an inevitable shift to vehicles powered by electricity—took cognisance of the imminent reincarnation of an iconic brand, the legacy of which, until recently, was only vicariously felt and known. Lohia Machinery Ltd. might not ring a bell to many, but its acronym, LML, will elicit a nostalgic memory. The manufacturer—which was once a household name with its Vespa line of scooters and its four-stroke motorcycle, the LML Freedom—announced it will be foraying into the EV two-wheeler segment.
LML was incorporated in 1972 and operated out of Kanpur. In 1983, it forged a technical partnership with Piaggio of Italy to manufacture 100 cc scooters in the country. Its Vespa line of scooters is largely credited for dethroning Bajaj’s monopoly in the scooter market. However, LML’s partnership with Piaggio ended in 1999.
Reliability and value-for-money, with a modern outlook, is how a refreshed LML will re-launch itself in the Indian market, says Yogesh Bhatia, CEO and MD of LML in a telephonic conversation with Fortune India. “The legacy of the LML brand is deep-rooted in the hearts of the hundred crore people who bought and used an LML scooter, and we tend to offer that same legacy but in a technically advanced and high-quality product,” he says.
Certain key details of its product, including pricing, are yet to be revealed. Bhatia alludes that the product will be priced somewhere in the mid-range of EV two-wheelers. “I am not saying that we’re going to offer an entry-level product or a premium product, but our product will be priced somewhere in the middle,” he says.
The company plans to address the gap of inadequate power supply in the country by eliminating the need for a charging setup altogether. “The idea is simple—the batteries will be removable. Our customers will be able to charge it just like a mobile phone,” says Bhatia. This rudimentary yet effective strategy would be critical as the company plans to operate close to 1,000 dealerships and service centres—many of which are expected to be in the smaller cities and towns.
LML had previously partnered with Piaggio of Italy to manufacture its iconic Vespa scooters and with Daelim of South Korea later. Bhatia denied commenting whether the company will ink yet another alliance with a foreign manufacturer, but says it “is evaluating proposals from both India and abroad.”
The company’s fortunes, however, is said to have started going downhill when Honda introduced the Activa. Its automatic transmission yet affordable pricing meant few fancied to buy LML and Bajaj’s scooters. While the Freedom did well in the early 2000s, cut-throat competition with new, innovative products from rivals exacerbated the company’s dismal financial performance. By the time Piaggio announced its re-entry in the Indian market in 2012—without a local collaborator—LML was crippling. It filed for insolvency in 2017 and shut shop in 2018. It was auctioned to Rimjhim Steels for ₹243 crore in the same year. LML owed ₹350 crore to government institutions and employees by the time it was auctioned.
Notwithstanding its tumultuous past, Bhatia wants bygones to be bygones. “I have a lot of respect for the previous management and the foundation they built, but I can’t deny certain mistakes that this brand made. The perpetuity of any organisation can only be ensured if they adapt,” says Bhatia, citing the salt-to-steel conglomerate Tata, which has successfully stood the test of time.
Industry experts, however, feel that despite the high recall value of the LML insignia, it will still have a lot to prove, especially after its financial troubles. “No doubt LML was a brand to reckon with in the 80s and 90s, but today’s generation is void of the brand image and they will look at it like any other two-wheeler EV manufacturer in the country. They also have negative baggage of leaving the two-wheeler industry in 2018 due to insolvency,” says Vinkesh Gulati, president of the Federation of Automobile Dealers Associations (FADA).
Gulati also believes that the Indian two-wheeler market has evolved in the last 20 years and consumer preference has changed drastically. Consequently, LML will have to familiarise itself with the market all over again. “It will be interesting to see at what price point they will enter coupled with battery range and features in their products. I think, if they try to manage a good design like what they had then, which had given them a bold feeling, it should click as a product as most of today’s two-wheeled EVs look very weak in terms of their design language,” he adds.
Contrary to popular perception of the pandemic impeding vehicle sales (a belief which has been strengthened by disappointing sales figures and the global semiconductor shortage), unlike other developed markets, two-wheelers, three-wheelers and the intercity bus segment are likely to be early adopters in India and lead the transition towards electrification. Ritu Goswami, assistant vice-president, ICRA, believes the electric two-wheeler penetration to increase to 8-10% of new vehicle sales by FY25, from 1% in FY21. Most of the incumbent two-wheeler OEMs have already entered or are planning to enter the electric market in the near-term and competition will invariably increase,” she adds.
The invariable increase in the competition notwithstanding, Goswami believes India being the world's largest two-wheeler market offers immense potential for companies—be it legacy OEMs or new entrants—if they can deliver a good quality product and customer experience, at par or better than conventional ones. The burgeoning sector, according to Goswami, is largely attributable to a lot of factors, including favourable cost of owning an electric two-wheeler (aided by government subsidies and falling battery prices), amidst rising fuel prices (which irrefutably increases running costs for conventional two-wheelers) and lower reliance on charging infrastructure.
LML has been a legacy two-wheeler manufacturer and managed to fend off competition from rivals like Hero and TVS during its peak. The burgeoning market now presents a tremendous opportunity for the company to make its products become commonplace on Indian roads again. Bhatia says based on responses to their scooters, the company might take a call on rolling out EV motorcycles.