After parting ways with UK's Ultra Motors, Hero Group's 100 per cent subsidiary, Hero Electric, is firming up its plans to go solo in the two-wheeler electric vehicle category. On the anvil is an acquisition in the motor & controller space and investment to boost manufacturing and R&D.
The company has been talking to several companies in India and abroad for a possible acquisition. "We are looking at companies in India as well as China and Taiwan which could complement us in the motor and controller domain. We have earmarked close to Rs 20 crore for the same," said Naveen Munjal, chief executive officer, Hero Electric.
Munjal said negotiations were still on and that the acquisition would, in all likelihood, be wrapped up within the next six months.
The company is looking at investing around Rs 80 crore for expansion. Of this, Rs 50 crore will be put into expansion of the plant at Ludhiana, Rs 20 crore for the proposed acquisition and the rest will be invested in R&D. The investment will be funded through internal accruals.
The company had entered the electric scooter segment in 2007 in technical collaboration with Ultra Motors. Subsequently, the two parties had a different map for the road ahead and have henceforth, decided to sell electric vehicles separately.
Hero Electric had entered the electric vehicle market with the 250 watts range of vehicles and is now gearing up to launch high-powered vehicles.
"We are looking at launching a higher powered vehicle in the range of 750 to 800 watts electric two-wheelers around July," said Munjal.
Seeing a spurt in growth, the company has doubled its production capacity from 220 units a day to 440 units a day across two shifts. With the enhanced capacity, Hero Electric is looking at targeting sales of 70,000 units this year.
The company has identified Gujarat as one of its major markets. In 2007-08, the company recorded sales of 6,000 units through 26 dealerships capturing a market share of 49 per cent. This year the sales target in the state is 16,000 units through 40 dealerships expecting to take a market share of 60 per cent.
