Hero MotoCorp plans to invest INR 700 crore over the next three years to add new products to its portfolio, expand the dealer network and increase its production capacity, reports Economic Times. The update was shared by Naveen Munjal, Managing Director of Hero Electric.
Munjal told the website that although the sales of electric two-wheelers were subdued, the company expects to see a pick-up in demand over the coming years. Speaking to Economic Times, Munjal said:
To start off, the first few months were kind of slow because of the new policies which came into play… the new homologation norms (under Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India or FAME-II scheme). But now we are back on track. We will grow (over last financial year).
Munjal also spoke about the arrival of brands like Bajaj Auto in the electric two-wheeler space. He added:
Larger players coming means that the time has come, or is coming, for the internal combustion engine (ICE) two-wheelers to start converting. When you talk of ICE converting, you are looking at 20 million units converting over a period of time. Now it is anybody’s guess whether it will happen in five or 10 years but the market will start to expand very, very quickly.
Regular followers would know that Bajaj Auto revealed its first electric scooter, the Chetak in October this year. The Pune-based two-wheeler brand will launch the vehicle in January 2020. The Chetak electric will be offered in Pune and Bengaluru in the initial phase. KTM and Husqvarna will also develop their own products using the Bajaj Chetak electric platform.
Munjal also added that the company is not basing its business model on the government policies at this point of time. He added that the company aims to make environmental, economic and commercial sense for consumers to switch to electric vehicles.
Keeping the expectations of the upsurge in demand in the future, Hero Electric has started to scout for locations to set up a new facility, its second manufacturing plant in India. The existing factory, which is installed in Ludhiana, boasts a capacity of 80,000-90,000 units per annum. The company stated that it has sold almost 52,000 electric two-wheelers in India between April and September 2019.