Hero Honda to put Rs 150 cr more into Haridwar plant | autos | Hindustan Times
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Hero Honda to put Rs 150 cr more into Haridwar plant

The company barely held on to its sales in 2007-08 and is confident of achieving the same this year as well, reports Deepak Joshi.

autos Updated: Apr 08, 2008 23:23 IST
Deepak Joshi

The country’s top motorcycle-maker, Hero Honda Motors Limited, on Monday said it would invest an additional Rs 150 crore in its new facility in Uttarkhand and hoped that the government would not raise interest rates that are affecting two-wheeler sales.

“We hope the government does not raise interest rates to curb inflation. We are already suffering due to hardening of interest rates,” Hero Honda Motors managing director Pawan Munjal said after the commissioning of the plant here.

The company barely held on to its sales in 2007-08 and is confident of achieving the same this year as well. In such a scenario, the company does not plan to increase the prices of its models in the immediate future.

“The commodity prices have been on the upswing. We are watching the situation, but we are not in a great hurry to revise the prices,” Munjal stated.

He said the emergence of low priced ‘Nano’ from Tata Motors stable is unlikely to impact motorcycles sales in a big way. “Nano will not impact our sales. There is a huge market at the lower end that we cater. It is not going to opt for Nano,” he added.

The Haridwar plant, spread over 275 acres, will have an initial installed capacity of 5 lakh units and will be scaled up to 10 lakh units by the end of the year. “We hope to manufacture 7 lakh units in the first year of production,” Munjal said.

The company has already invested Rs 450 crore in the plant and will be making additional investment of Rs 150 crore by the end of the year to raise capacity. The company hopes to expand installed capacity to 1.5 million units by 2010 with a combined investment of Rs 1,900 crore.

The group will now have a capacity to manufacture 4.4 million units.

Nearly 100 ancillaries will be setting up their manufacturing base in Haridwar over the next two years. To begin with, 40 ancillary units will be setting up their manufacturing base in the industrial parks being developed by Arrow Infrastructure, a group enterprise, for Hero Honda and its associates.

Hero Honda hopes to take advantage of the tax benefits offered by the state and central governments to shore up its bottomline. It also plans to manufacture Splendour Plus and Passion Plus, its two high volume high margin products.

“A project Samadhan will decide on utilisation of capacities at Gurgaon and Dharuhera we ramp up capacities in Haridwar,” Munjal stated.