Hero MotoCorp planning to invest Rs 2,575 crore in India

Hero MotoCorp planning to invest Rs 2,575 crore in IndiaThe largest two-wheeler maker by volume in the world, Hero MotoCorp has said that it is planning to invest Rs. 2,575 crore in India to set up two new manufacturing plants in Gujarat and Rajastan and a new integrated research and development centre (R&D) centre will be made operational during 2013-14.

Hero MotoCorp currently has a total annual capacity of nine million two-wheelers and the additional units will allow the company to take a giant lead over its competitors including Bajaj and former partner, Honda. The new units will add a combined capacity of two million units to the country’s production capabilities.

The company will set up the Rs 400 crore R&D centre, which will be responsible for designing new bikes. Earlier the company depended upon the Japanese partner for new bikes as well as technology.

“We have huge investment plans in various parts of the organisation. We will be setting up our fourth plant at Neemrana in Rajasthan, which will come up first,” said managing director and CEO Pawan Munjal.

The company sold 6.2 million vehicles till the end of financial year 2012, recording a compounded annual growth rate of 18.8 per cent compared to three years ago period. The company enjoyed a market share of 56 per cent in the Indian market at the end of March 2012. Hero MotoCorp's adjusted operating profit margin was at 12% in the fourth quarter of FY12, while net sales grew 11.9% during the quarter.

The company is aiming to increase its export turnover from the fast growing markets in African and Latin American markets in the medium term. The total export turnover for the company accounted for just 2.3 per cent of its financial year net sales.