The country’s largest two-wheeler manufacturer, Hero MotoCorp, in the last 42 years has expanded its reach to more than 52 countries in the world, and for that it has spread its wings in manufacturing too — from just one plant in 1984 in Haryana to more in Uttarakhand, Rajasthan, Gujarat and now in the South (Tirupati in Andhra Pradesh) – along with R&D centres and Global Parts Centres (GPCs). The company is setting up its second GPC in Tirupati and this landmark facility is coming up with an investment of over ₹750 crore, that will serve as the foundation of an expansive ₹3,200 crore plus investment roadmap.
Pawan Munjal, Executive Chairman, Hero MotoCorp, told businessline that after North and West, a manufacturing facility and a GPC was must to serve not only the domestic market, but also the export markets. On the market conditions, Munjal said both domestic as well as export markets were doing much better than they were anticipated, and not only in internal combustion engine (ICE) products, but also electric vehicles (EVs) with its partnerships with Ather Energy. Hero MotoCorp is also launching electric motorcycles with its partnership with California-based Zero Motorcycles and more premium products with Harley Davidson.
Edited excerpts:
How will the new GPC plant help you in serving customers worldwide?
We have serviced our customers very well so far with the GPC in Neemrana. Now, we are at a point where it becomes imperative for us to set up one more GPC. We did not have to think twice where to go. We have a large campus in Andhra Pradesh (in Tirupati district), so we quickly took the call to put up the GPC 2.0 there, which is expected to be operational in two years. The GPC 2.0 is going to be the biggest and more sophisticated than the Neemrana centre. For any industry or company like ours, which is selling automobiles or mobility, it is critical to have the availability of after-market parts for our consumers.
What is the scope for expansion in the Tirupati manufacturing facility and the GPC?
We have a large campus, so there is a lot of scope for expansion. We currently have a capacity of about half-a-million (five lakh) vehicles, which can be taken up to 1.2-1.5 million units a year soon, which will again require substantial investment and generate substantial employment in Andhra. Pradesh. With our current partnership with Harley Davidson, we are learning more about accessories and merchandising. Harley is very big for such things with almost 30 per cent of their revenue that comes from parts, accessories and merchandise. So, we are going to be upping our ante on accessories and merchandise very seriously and in a focused manner. The GPC in Neemrana is already servicing the current set of dealers and consumers and with the GPC 2.0, we are going to be increasing our accessories business and revenue.
In terms of your sales, how do you see the growth momentum in both domestic as well as exports, for both ICE and EVs, especially in challenging times, every now and then, because of global volatility?
Firstly, we are all for electrification and alternative fuel vehicles. In our R&D at the Centre for Innovation & Technology (CIT) in Jaipur and in Germany, we are doing a lot of work on new technologies. We’re preparing ourselves for the future. In the Auto Expo in 2012 too, we were the first one to actually showcase a hybrid scooter. Nobody was then talking about EVs. In terms of markets, I would say there are temporary hiccups. Having said that, even today, the demand is pretty good and our monthly numbers are also doing really well. And, my expectation for the two-wheeler industry is that it it will continue to grow at a very healthy pace.