The Telegraph
Since 1st March, 1999
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Plan to hike capacity

Calcutta, Sept. 17: Hero Honda plans to set up yet another manufacturing unit to jack up its production capacity. Sources said a feasibility study has been commissioned to ascertain the demand and supply pattern in the medium and long term. The report is expected to be complete by December.

“If everything goes right, we may come up with a third plant to meet the rising demand for our vehicles in the domestic market,” they said. The company, however, is yet to make up its mind about whether it should go for a full-fledged manufacturing unit or an assembly plant, they added. “The potential for an assembling plant has to be studied before taking a final decision on the proposed unit. The company may source the motorcycle kits from its two existing plants at Dharuhera and Gurgaon in Haryana so as to optimise production.”

The Munjal-promoted Hero group and Japan’s Honda Motor Company own 26 per cent each in Hero Honda. The remaining stake is held by financial institutions and the public.

Sources however did not divulge the investment size for the proposed unit, or how funds would be mobilised for the expansion programme. “The project is still in the planning stages and nothing concrete can be stated till a decision is taken,” the said.

The company’s turnover, however, is set to cross the Rs 5,000-crore mark this fiscal though the auto market is yet to look up. It has set a steep target of over 20 per cent growth in sales volume.

“Demand for our vehicles has shown a steep hike even in the face of a downturn in the industry. Going by the demand pattern, we are quite optimistic of meeting our sales target so far as the number of vehicles is concerned,” they added.

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