Hero Motors eyes Rs 400 crore turnover prop via new plant

Plant coming up at Gurgaon

Hero Motors is expecting a Rs 400 crore turnover in the first year of operations from its new plant, which is coming up at Gurgaon near Delhi.

The company posted a turnover of Rs 250 crore for the year ended March 2003. The new plant, being set up with an investment of Rs 150 crore, is expected to ship its first bike from January 1, 2005, with trial production expected in August this year.

Hero Motors has tied up with Aprilia, the $750 million Italian automobile major in November 2003, to get the technology for the new plant.

"We have signed an export commitment contract with Aprilia to ship at least 50 per cent of our production to Europe in five years," Pankaj Munjal, managing director of Hero Motors, said at a press conference here yesterday. The plant has a capacity to produce 4.5 lakh vehicles and five lakh engines a year.

"This is the first time that any automobile manufacturer in the country has got such a major outsourcing contract from overseas," Munjal claimed.

"As of now, our tie-up is confined to getting relevant technology and the Italian company might participate in the equity of the new plant at a later point," he added.

The new plant will roll out three new models - one each in the 50cc, 100cc and 150 cc categories. "The vehicles will be marketed under three different brands - Aprilia in Europe, Hero-Aprilia in India and Hero brand in countries such as Indonesia, Brazil, China and Iran," Munjal said.

In the domestic market, Aprilia- branded vehicles will be sold at a premium price ranging between Rs 33,000 and Rs 60,000

Hero Motors is expecting to post Rs 300 crore turnover for the current year and expects to record Rs 450 crore next fiscal. The company launched its new 92cc bike - Hero Sting here today.

The bike is entirely designed and styled by Hero Global Design, the design and styling company of the Hero group. Primarily targeted at collegians and young executives in the age group of 18 to 24, the bike is priced at Rs 25,990. The vehicle was launched in UP last month and is the second city for the launch.

"We are expecting to sell about 70,000 Stings in the country and export 30,000 bikes this year," Munjal said.