Hero MotoCorp, the country's leading two-wheeler maker, is aspiring to consolidate its position at the top with an aggressive campaign in the Indian auto market. The company has decided to pitch-in a capital investment of Rs. 1,100 crore on its domestic operations, in order to stay ahead of the competition headed by Honda Motorcycle and Scooter India and Bajaj Auto Limited in the country.
As per sources, Hero MotoCorp has planned fresh investments towards upgrading the output yield at its manufacturing facilities, augmenting its network and carrying out more brand building exercises on the Indian turf. The company has also revealed plans of several new model launches across different segments of the domestic two-wheeler market. Expressing his views on the company's future plans for India, Ravi Sud, Senior Vice President (VP) and Chief Financial Officer, Hero MotoCorp, was quoted as saying, “We are no strangers to competition. We have earmarked a capex of 1,100 crore for FY14 and put in place a multi-focal strategy to sustain and build upon our leadership through new launches, capacity addition, network expansion and brand-building initiatives.”
Reportedly, Hero MotoCorp will dedicate an investment of Rs. 600 crore towards its upcoming production facility and global parts centre in Neemrana, Rajasthan. The company has also planned a sum of Rs. 100 to 150 crore for the setting up of its cutting edge and state-of-the-art Research and Development (R&D) centre in Kuka, also in Rajasthan. Hero MotoCorp's upcoming Neemrana unit is expected to increase its total installed capacity by over 750,000 units to an incredible 7.65 million units, when it starts operations. As per Ravi Sud, the country's largest motorcycle manufacturer has also planned an investment of Rs. 400 crore on its existing factories, the proposed manufacturing facility in Halol, Gujarat and IT instruments.
Expressing his views on the company's aggressive plans directed at augmenting its share in the market, when its profit margins are under pressure, Sud was quoted as saying, “The Indian two-wheeler market has become competitive, and market share, once lost, is very difficult to gain. Margins, on the other hand, are temporary fluctuations and can be managed at an appropriate time.” He further added, “Most companies hold back investments at the time of slowdown and face the consequences of capacity shortage when demand suddenly picks up. So clearly, we are going ahead with our planned investments.”