Hero Cycles to tie up with insurance firms to cover poor
The world's largest bicycle maker Hero Cycles today said it is in talks with insurance firms to provide health cover to its rural customers as part of its initiative to uplift the poor.business Updated: Aug 15, 2011 11:39 IST
The world's largest bicycle maker Hero Cycles on Monday said it is in talks with insurance firms to provide health cover to its rural customers as part of its initiative to uplift the poor.
The company, which has tied up with Allahabad-based Sonata Finance for financing bicycle by providing loans of Rs 100 per week in rural areas, is considering to pay health insurance premium for the poor customers on purchase of the company's bicycles.
"About 500 million people in India cannot afford to buy a bicycle. We want to give them mobility and for that we have tied up with a micro finance firm to offer loans. Now, we want to secure their lives," Hero Cycles Managing Director Pankaj Munjal said.
Without sharing details, he said the company is currently talking to one public sector and one private sector health insurance provider to tie up for this purpose.
When asked if the company would also pay the premiums for the insurance products, Munjal said: "These are very poor people of our country. Though we have not decided yet, we may do something for paying the premiums for the poors."
The company will introduce the health insurance services from next month onwards, he added.
"Hero Cycles want to contribute with its limited strength by giving them a sense of security. These people will be given health insurance policies when they come to buy our bicycles," Munjal said.
Hero Cycles' mass-level bicycles are available between Rs 1,800 and Rs 3,000 through about 2,400 multi-branded dealerships across the country. Out of its total sales of 53 lakh units last fiscal, 65 per cent came from the rural areas.
Even as the company is focusing on the rural market, it is not ignoring the premium segment bicycles market.
Last week Hero Cycles had said that it will foray into the premium segment by launching products in Rs 3,000-Rs 20,000 range by November this year and will set up exclusive outlets for selling them.
The company is setting up a dedicated unit for Rs 50 crore to roll out the premium cycles at Ludhiana. The facility will have a capacity to produce five lakh units annually. The existing plant rolls out 19,000 units every day.
It is also scouting for partners in the US, Germany, Japan and the UK to export the cycles under a contract manufacturing deal. The company at present exports a small quantity to Spain, African region and Poland.
Hero Cycles is aiming at pushing up its revenue to over Rs 2,000 crore in 2011-12 from Rs 1,650 crore in last fiscal.