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Journal of Case Research

Volume III

Issue 01

Technology as A Tool for Turnaround: A Case of Scooter India Limited A. Sahay1 and Sanjay Mohapatra2 It was October, 2000, the siren blew at 2.30 pm and the employees of morning shift were leaving the factory after their duty. Dr. Sahay, Chairman & Managing Director of Scooters India Ltd. Looked through the glass window of his corner room and was wondering if he could make the company profitable and secure their jobs through infusion of home grown incremental technology. Can this incremental technology sustain in the long run. He knew the only way Scooter India Ltd. (SIL) could survive was to take an aggressive position in the market through new products and technologies but where to get the required technology? With liberalisation, the global technology developers/owners were no more interested in technology transfer. In-house as well indigenous collaborative efforts had reached their limits. Questions like what should be his strategy, will the strategy be the panacea for the problems the company would be facing in future were moving in his mind’s screen. He sought an answer, but only time will tell. About the company Incorporated in 1972, Scooters India Limited is an ISO 9001:2000 and ISO 14001 Company situated at 16 Km mile stone, South-west of Lucknow, the capital of Uttar Pradesh on NH No 25 and is well connected by road, rail and air. It is a totally integrated automobile plant, engaged in designing, developing, manufacturing and marketing a broad spectrum of conventional and non-conventional fuel driven 3-wheelers.

A. Sahay, Professor of Strategic Management and Chairperson Centre for Innovation and Entrepreneurship, Birla Institute of Management Technology, Greater Noida, India. Email: arun.sahay@bimtech.ac.in 1

Sanjay Mohapatra, Associate Professor, Xavier Institute of Management, Bhubaneswar, India Email: sanjay@ximb.ac.in. 2

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Journal of Case Research

Volume III

Issue 01

Company’s plant owes its origin to M/s. Innocenti of Italy from which it bought over the plant and machinery, design, documentation, copyright etc. The company also possesses the world right of the trade name LAMBRETTA / LAMBRO. The Beginning Way back in June 1971, the government of India received an application from Automobile Products of India Ltd. (API) for substantial expansion of its capacity for production of two wheelers and three wheelers. It was the time when the licensed production capacity of scooters in India was far below the demand. API proposed to buy an old plant of Innocenti that was lying unused in Italy for two years owing to labour problems. Machines in the plant were in condition that assured a varied life from four to eight for production of more than 100,000 scooters a year on two-shift working with investment in some additional machines, backup facilities, tools and equipment. API already had technical collaboration with Innocenti and was manufacturing Lambretta scooters, a well-established brand of Innocenti. While examining the proposal, the concerned secretary in the government proposed a joint venture between Innocenti, API and government. Finally, an agreement was signed on June 16, 1972 to set up SIL as a joint venture. Innocenti sold complete available technical documentation, world rights for the manufacture of two-wheeler Lambretta scooters, and the old plant at a FOB cost of US $2.4 million on “as is where is” basis to SIL. Subsequently, Innocenti, Italy dissolved itself after the disposal of the plant and did not contribute to the joint venture. Project Implementation Phase Prime Minister, Mrs. Indira Gandhi laid the foundation for the plant on April 8, 1973 at Lucknow, capital of Uttar Pradesh, a northern state of India. Lucknow had little industrialization and inadequate infrastructure of roads, telecommunication and power.

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Journal of Case Research Commissioning of the Plant:

Volume III

Issue 01

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