Hero Electric, manufacturer of electric two-wheelers and a division of Hero Cycles, is planning to set up an assembling unit with an annual capacity of 60,000-70,000 units for its electric two-wheeler. However, the location is yet to be finalised.
The company also plans to set up a motor manufacturing unit for its electric two-wheelers, which is being imported. The proposed motor unit may be set up either as a greenfield project in technical collaboration with a European company or after acquisition.
In an interaction with Business Standard, Managing Director of Hero Electric Naveen Munjal said, “We are planning to set up an assembling unit in order to cater to the growing electric two-wheeler market. The existing Ludhiana unit will act as a feeder for the proposed facility. The proposed unit will have a manufacturing capacity of 60,000-70,000, so far the location is concerned, it may either come up in North or South. The probablity of the plant being set up in South is more to tap the huge market.”
The company has its manufacturing facility in Ludhiana (Punjab) and has a manufacturing capacity of 120,000 units of electric two-wheeler per annum.
The company also plans to set up a motor manufacturing facility for its electric two-wheeler.
He added, “We are planning to set up this unit for our electric two-wheeler. The company imports motors from China and Taiwan. The proposed unit may be set either as a greenfield project or by acquiring exiting company.”
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He further added, “We are in talks with two companies for acquisition.” However, he refused to give the details."
But at the same time, setting up a greenfield unit could not be ruled out in technical collaboration with some European company. If everything goes well as planned either we may acquire the company or set up our own greenfield project in Ludhiana with a capacity of 2 to 3 million units per annum,” he informed.
The company has made a budgetary provision of Rs 80 crore. The money would be spent on R&D, setting up motor manufacturing unit as a greenfield project or by acquisition.
On being asked, whether the company has plans to export, he added, “We are planning to export these two-wheeler initially to Saarc Countries and later on to Latin America and European countries.
The export will commence from this fiscal year and initially we are planning to export 4,000-5,000 units.
Further, the company is planning to ramp up its dealer network from 160 to 310 by the end of this fiscal year for comprehensive service and sales for its electric two-wheeler, which was launched in January 2007.
The company is targeting to sell 70,000 vehicles this year and is hopeful to achieve a turnover of Rs 130 crore. Last fiscal, it had sold 20,000 vehicles. He added that the company is hopeful of achieving turnover of Rs 400-450 crore by 2010-11.