New Delhi: The world's largest two-wheeler maker by volume, Hero MotoCorp, will invest 2,575 crore to set up two new manufacturing plants in Gujarat and Rajastan and a new R&D centre by 2013-14.
Hero, which saw an unprecedented growth in volumes, crossed the six-million units mark in the last fiscal. It will raise its installed capacity to nine-million units by 2013-14. It will invest in two plants in Rajasthan and Gujarat.
The first would come up at Neemrana by first quarter of FY 2014 with 400 crore investment and will have an initial installed capacity of 7.5 lakh units per annum. Its proposed Gujarat plant will see an investment of 1,100 crore and have 1.2 million units capacity by the second quarter of 2013-14.
Hero MotoCorp MD and CEO Pawan Munjal told reporters in Delhi on Monday, "Once the fourth and fifth plants gets on stream, our total manufacturing capacity in India will reach beyond nine-million units from the current seven million coming from three plants in India. We are gradually moving towards South and would aim to spread our manufacturing operations across the country."
The company also announced plans to set up an integrated research and development (R&D) centre spread across 250-acre near Jaipur in Rajasthan entailing an investment of 400 crore.
The new facility would enable Hero to independently design and develop bikes, scooters and other two-wheelers after its snapped its 27-year-old JV ties with its Japanese technology partner Honda in December 2010. The Indian promoter of the firm, the BM Munjal family, had bought the entire 26% of Honda in Hero Honda for 3,841.83 crore.
"We plan to set up new centre where we will have an in-house collaborative product designing and development capability. We will also have a 2.1 km race track for test high displacement superbike as we go global with our new range of products," Munjal added.
Besides, Hero would also invest 500 crore in capacity expansion of its existing plants at Haridwar, Daruhera and Gurgaon. All the investment will be funded through cash reserves of Rs 4,000 crore of HMCL, Its CFO Ravi Sud said. The company will be launching a mass-market bike, Ignitor in next few weeks.
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