Targeting the premium bicycle market which is growing at 40 percent annually, Hero cycles Monday opened a new all-aluminium cycle plant here with an aim to increase sales five-fold.
The company launched two all-aluminium cycles -- 'Astra' and 'Orion' -- under its premium 'Octane' brand. The bikes will be starting from a base price of Rs.7,000.
"The premium segment is growing at 40 percent annually and this plant will produce premium bikes made completely of aluminium," Pankaj Munjal, co-chairman and managing director of Hero Cycles, said.
"We sold 36,000 (premium) bikes last year and with this plant getting operational, we are expecting the number to rise five times this fiscal year," he said.
The new plant, which has been set up in Hero's existing Ghaziabad based plant will produce one lakh cycles annually and will play a major role in helping the company realize its goal of achieving 15 per cent growth this year.
So far, the company was importing aluminium frames for production of its high-end bicycles but now the production will be indigenised and cut costs.
"Though, in the past few more players have manufactured Aluminium cycles, but not at this comprehensive level. Hero Motors Ltd will be the first Indian company to have started this major shift," said Munjal.
The company's annual turnover for the fiscal 2012-13 was Rs.1,450 crore and the annual sales volume is over 5.1 million cycles.
According to Munjal, the premium cycles are aimed at the urban markets particularly at those passionate about biking.
"We plan to reach out to those who have a certain passion for adventure and are not ready to compromise with quality," he said.
