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Hero Honda to hike Hardwar capacity

Hardwar, April 8: Hero Honda will invest Rs 1,900 crore in its new facility in Hardwar to take its capacity to 1.5 million units by 2010.

The company plans to invest Rs 600 crore to make around one million units this year.

The facility, Hero Honda’s largest, will initially manufacture high-volume, high-margin models such as the Splendor Plus and the Passion.

The plant will have an initial capacity of 2,000 units per day, which will be scaled up to 4,000 units by the end of this year.

Around 100 ancillaries of the company will also set up a manufacturing base near this plant in the next two years. To begin with, about 40 ancillaries will set up facilities in the industrial parks being developed by Arrow Infrastructure, a Hero group company.

Arrow Infrastructure will also set up residential complexes and shopping malls, which will come up within the 275-acre manufacturing park. The company had completed the construction of this plant last year but delayed operations to get the privilege of a full 10-year tax holiday, which the Uttarakhand government has announced.

Hero Honda managing director Pawan Munjal said, “We plan to launch 12 products in the next 18 months.”

The company currently has a production capacity of 3.9 million units at its facilities at Manesar and Dharuhera in Haryana.

Asked how the company would utilise the excess capacity at its Haryana plants after most of the production was shifted to Hardwar, Munjal said, “We are looking at ways to utilise capacity.”

He said rising input costs, especially that of steel, had been putting pressure on prices, adding that, “Before raising prices we will take an overview and wait and watch the situation. We are in no great hurry to raise prices.”

Hero Honda had cut prices on its two-wheeler range by Rs 1,000-2,400 after an excise duty cut of 4 per cent was announced in this year’s budget.

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