Industry

Hero MotoCorp to invest Rs. 5,000 crore to raise global production capacity

Pawan Munjal, Vice-Chairman, CEO & Managing Director, Hero Moto Corp Ltd . at the company's fourth manufacturing facility at Neemrana in Rajasthan on Monday. Photo: Kamal Narang  

The country’s biggest two-wheeler maker Hero MotoCorp’s on Monday said it has earmarked an investment of Rs. 5,000 crore to build new manufacturing plants, including outside of India, and an R&D centre within the next three years.



“We have lined up a total investment of over Rs. 5,000 crore across the globe, including manufacturing plants in Colombia and Bangladesh, and new plants coming up at Gujarat and Andhra Pradesh and the Hero Global Centre for Research & Design at Kukas in Rajasthan,” Vice Chairman and Managing Director Hero MotoCorp V. Pawan Munjal said.



The company, which on Monday started production at its Rs. 1,050 crore fourth manufacturing facility at Neemrana in Rajasthan, aims to surpass 100 million units in cumulative production by 2020. With the coming up of this plant, the company's production capacity has risen to 7.65 million units per annum, on track to achieve the target of 12 million annual capacity by 2020. By the same time, it aims to have 20 plants (manufacturing as well as assembly).



Commenting on increasing the capacity, Mr. Munjal said: “We have set up aggressive targets for ourselves and we want to be prepared. I am confident that market will grow and we will gain market share.”



The Rs. 5,000 crore figure includes Rs. 1050 crore investment at Neemrana plant. About Rs. 1,600 crore each would be invested at Gujarat and Andhra Pradesh plant, respectively. While over Rs. 650 crore will go into R&D centre in Kukas, Rs. 100 crore has been earmarked for Bangladesh and Rs. 200 crore for Columbia.



The Neemrana plant has an initial annual capacity of 7,50,000 units and will produce the company's range of motorcycles and scooters. Going forward the company has plans to develop high-end two wheelers from this facility.



The two-wheeler giant is also set to commence construction of its fifth plant in Gujarat and sixth plant Andhra Pradesh soon.



Mr. Munjal added that the company is eyeing a 50 per cent share of the two-wheeler market in India, however, he did not specify a timeline for it. In motorcycles, the company leads the market with 50 per cent market share, while in scooters segment it takes the second spot, behind Honda Motorcycle and Scooter India (HMSI).



“Scooters are growing at a faster pace than motorcycles. While presently, we have only two products in the segment – Pleasure and Maestro, we have pipeline which we will introduce starting early next year,” he added.

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Printable version | Nov 23, 2020 1:15:58 PM | https://www.thehindu.com/business/Industry/Hero-MotoCorp-to-invest-Rs.-5000-crore-to-raise-global-production-capacity/article11078004.ece

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