Hero MotoCorp Announces its Largest-ever Investment

• TO PUMP IN MORE THAN RS. 2500 CRORE IN BIG CAPACITY RAMP-UP & R&D
• TO SET UP THE LARGEST STATE-OF-THE-ART, INTEGRATED TWO-WHEELER R&D CENTRE IN THE COUNTRY
• FORAY INTO NEW INTERNATIONAL MARKETS IMMINENT, TO COMMENCE BY NEXT QUARTER
• Hero MotoCorp Ltd. (HMCL), the world’s largest two-wheeler manufacturer, today announced its aggressive growth plans for future, as it looks to further strengthen its leadership position. Unveiling a slew of strategic initiatives to move towards its vision of becoming truly a global leader in the two-wheeler space, Mr. Pawan Munjal, Managing Director & Chief Executive Officer, Hero MotoCorp Ltd, said here, “We have been moving with great speed towards giving shape to the vision that I outlined at the launch of our new brand identity in London less than a year back. We propose to invest over Rs 2500 crore in setting up new plants, expanding capacity at our existing plants and in building an integrated R&D centre.

We will be setting up two new plants - in Rajasthan and Gujarat – where we are in advanced discussions with the respective state governments. “We will also be soon setting up an integrated state-of-the-art Technology/R&D centre spread over 250 acres at Kukas, Jaipur in Rajasthan, which is going to be the largest two-wheeler R&D centre in the country,” he added.  

HMCL’s fourth plant will come up at Neemrana in Rajasthan and fifth plant in Gujarat. HMCL will be making an initial investment of Rs. 400 crore to set up its fourth plant at Neemrana in Rajasthan. Construction of the plant will commence soon, so as to get it operational by Q1, FY’14. The plant, which will provide direct employment to over 1000 people, will have an installed capacity of 750,000 units per annum. HMCL has also signed a State Support Agreement (SSA) with the Gujarat government to set up a plant in the state. It expects to make the plant operational by Q2’FY14, and has earmarked a sum of Rs. 1100 crore to be invested in this plant. The total installed capacity of the fifth plant will be 1.2 million per annum, going up to 1.8 million in the next phase. The plant will provide direct employment to over 2000 people.

With this expansion, total installed capacity of the company would be touching more than nine million units in two years’ time – which is in line with the stated objective of reaching 10 million units in the next five years. HMCL’s new state-of-the-art integrated R&D centre at Kukas will be set-up with an initial investment of Rs 400 crore. Built over an area of 250-acre, the centre will be the largest two-wheeler R&D set-up in the country, and will employ over 500 engineers. Having already tied-up with EBR and AVL for bike and engine technologies, the company is also exploring additional strategic alliances and partnerships to further scale up its R&D capabilities. HMCL today also announced a substantial investment of Rs. 500 Crore in further expanding capacity at its existing facilities at Dharuhera, Gurgaon and Haridwar and allied expenditures.

Announcing the global foray of the company, Mr. Munjal said, “Now that we are on the threshold of becoming a truly global company, our initial focus is on markets where the volumes are large, and products can be sold with minimum changes. So right now, our existing products with suitable modifications will be made available in these new international markets. We have already identified partners for these markets. We expect a growth of at least 25 per cent in our international business first year of our opening these new markets.”

As for the Indian market, we have already introduced ‘Hero’ branded motorcycle – Impulse and the 110cc scooter “Maestro”, which have received excellent response from customers. We have also re-launched “Splendor” and “Passion” under the Hero brand name this quarter. Going forward, we will be re-launching our entire range under the “Hero” brand name, and will complete this exercise by the second quarter of this fiscalTo further strengthen our presence in the 125cc segment, we are going to launch the new 125cc motorcycle “Ignitor”, which was earlier also showcased at the Auto Expo in Delhi in January.