The Hindu Business Line : Hero Motors may source parts for US co

HERO Motors, part of the Rs 7,800-crore Hero group, is all set to sign up as the sourcing base of parts for a $22 billion Fortune 50 company based in America and an announcement to this effect will be made in three weeks from now.

Mr Pankaj Munjal, Managing Director, Hero Motors, told newspersons here that the new venture will also "change the capital structure of the company'' but refused to venture further information about the proposed change.

Mr Munjal, who was in Pune to unveil its new step-thru bike Sting, said the work is now on for the development of a world bike for its Italian partner, Aprillia.

The company is working from a basic drawing supplied by the Italian major and will work from design to manufacture of the `Hero-Aprillia Twister' which is expected to roll into the market by mid-2005.

The company has bought land at Mannesar in Haryana for the Rs 200-crore project, which will eventually see four lakh vehicles being manufactured, Mr Munjal said.

"The bike will mark the entry of a made-in-India two-wheeler into the premium end of the motorcycle market in Europe where it will sell for 1,800 euro as against other bikes that sell for 1,500 euro," he said.

"Hero Motors is now developing itself as a company which will offer design to manufacture to joint R&D capabilities with partners," he said.

The company has also bagged Rs 600 crore worth of contracts for the supply of engines, engine parts, electricals and vehicles to Aprillia over a three-year time frame, he said.

Meanwhile, the company plans to tap the huge population of cycle owners in the country as the target audience for its new step-thru, Sting.

Priced at just under Rs 24,000, the bike is cheaper than all the existing entry level bikes in the market and is expected to tempt bicycle owners to graduate upwards with affordable financing.

The company is also betting on it to make an impact on the South-East Asian market where such vehicles are hugely popular.

Of the five million two-wheelers sold in the region annually, over 99 per cent are step-thrus''.

The Sting, designed by the Hero GlobalDesign , is being positioned as a safer bike due to its lower weight and height and control on the vehicle.

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