Hero Cycles will make chassis for German automobile giant BMW. The production will start at the bicycle maker's Chennai plant that goes operational in January 2015.
Hero Cycles co-chairman and managing director Pankaj Munjal confirmed this on Sunday the at the "Future of Bicycle Industry" conference here during the three-day India International Cycle Exhibition. The company will inaugurate its Bihar plant in June.
For increasing the sale of bicycles in the country, especially among the poor class, the company has in collaboration with non-banking financial institution Fullerton India floated a micro finance scheme in the rural belts. At the exhibition organised by United Cycles and Parts Manufacturer Association (UCPMA), Munjal said Hero Cycles would also takeover a German company in March to serve the bicycle industry in the US and Europe.
The company has to diversify now because in the past six years, Chinese bicycles have eaten into the market share of the Ludhiana industry. Since the deal with Fullerton in September last year, Hero Cycles has been able to sell 8,000 bicycles a month.
Bicycle for Rs 80
"The average down payment is Rs 2,500 for a motorcycle and Rs 50,000 for a car, yet many people in the country don't even earn Rs 100 a day. We give them a bicycle for a down payment of only Rs 80," said Munjal, adding: "The company opens a zero-balance account for these consumers."