Munjal Auto in expansion mode

Plans foray into four-wheeler component manufacturing

The Rs 200 crore Vadodara-based Munjal Auto Industries Ltd, a two-wheeler components manufacturer promoted by Hero Group, has now finalised its plans to make a foray into four-wheeler components manufacturing.

The company recently bagged an order for supply of components from General Motors for its cars, being manufactured in India at Halol near Godhra.

Munjal Auto has also initiated talks with four-wheeler manufacturers outside India for supply of various components while it expects to close deals with at least one major foreign two-wheeler manufacturing company soon.

"The order from GM India is to supply sheet metal assembly spares. We have a few more proposals on hand from some other four wheeler manufacturers and we expect the deals to materialise in some time from now. We may have something great to announce at the end of the current quarter," said Sudhir Munjal, Managing Director of Munjal Auto.

The company, which has its main plant at Waghodia, was earlier known as Gujarat Cycles Ltd and was set up by Hero Group in partnership with Government of Gujarat enterprise, Gujarat Industrial Investment Corporation (GIIC) as a 100 per cent Export-Oriented Unit (EOU) of bicycles.

With the change of gears in Hero Group to motorbikes, Gujarat Cycles also turned to Munjal Auto with Munjals hiking their stake to 70 per cent in the company and the company started playing the role of the major component manufacturer for Hero Honda motorbikes.

Now Munjal Auto also has a plant at Binola near Gurgaon for manufacturing components for two-wheelers and now the Group has decided to infuse Rs 33 crore as fresh capital for capacity expansion of Binola plant while a capacity expansion is also on the cards for the Waghodia facility, said sources close to the company.

"With fresh investments in the plants and machineries at both the manufacturing facilities, Munjal Auto will have capacity to produce 20,00,000 mufflers and 30,00,000 rims which will help to cater to new orders which we are expecting from overseas two-wheeler majors.

"While the Gurgaon plant may serve the needs of manufacturing components for four-wheelers, Waghodia unit is also compatible as GM orders will be served mainly from the Waghodia unit," the sources said.

Munjal Auto, which reported sales of Rs 184.47 crore by end of the last fiscal year, reported gross sales of Rs 604.72 million by end of the quarter ended June 30, 2004 with a PAT of Rs 62.28 million.