Munjal: Foreign dreams
London, Aug. 9: Hero MotoCorp (formerly Hero Honda) will invest over Rs 4,500 crore in the next five years to fund its global foray and domestic expansion.
Indias No. 1 two-wheeler company plans to enter over 30 international markets, including Africa, Latin America and South East Asia, over the next two quarters with Hero branded bikes. It also aims to sell over 10 million units globally (including India) in the next five years with 10 per cent of the sales coming from international markets.
Our vision is to replicate our domestic success story on a global platform. Initially, new bikes with the Hero brand will be exported to new markets. Eventually, we plan to set up assembly units in various parts of the globe which will act as hubs for all markets, said Pawan Munjal, managing director and CEO of Hero MotoCorp.
The investments will be made through internal accruals.
The bike maker, which enjoys over 55 per cent share in the domestic motorcycle market, is targeting $10 billion in sales in five years.
Two-wheeler sales in India expanded one-fourth to 11 million units in 2010-11, according to the Society of Indian Automobile Manufacturers.
Hero is also in talks with European and British firms for technological tie-ups. We have a Japanese firm, which is working exclusively for Hero MotoCorp to develop technical capabilities. We will also forge alliances with some European firms to work on designing and engines building, Munjal said.
UK-based Recardo and Austrias AVL are engine specialists, while the design houses could be from Europe or Japan, company officials said without specifying whether Hero was in talks with these firms.
Hero is also not ruling out a possible acquisition for technological expertise.
Style and design are our forte and we will build on this strength to expand in the domestic domain and foray into new markets, he said.
Hero MotoCorp will set up two manufacturing and assembly plants in south and west India.
The plant in the western part of India will support our international foray.
Though the company refused to specify the cities, industry sources said the facilities would be in Gujarat and Karnataka.
The company today showcased two products — a 150cc motorcycle Impulse and a 110cc scooter Maestro.
It also unveiled a new logo along with a company anthem composed by A.R. Rehman, as part of a new brand identity.
(The reporter is on a sponsored trip to London)