Seeking to cash in on the fast growing scooter segment in the domestic market, the country’s largest two-wheeler maker Hero MotoCorp plans to launch two new models in the next one year.
The company is also considering to scale up its monthly scooter production capacity to 1 lakh units by January 2015 and 1.5 lakh units in the mid-term.
“In the next one year, there will be two new scooter models in the market,” Hero MotoCorp Senior Vice-President & CFO Ravi Sud told analysts in a conference call.
While he did not elaborate on the segmentation of the new scooters, Sud said it would add to the company’s existing models — Pleasure and Maestro — to accelerate growth in the scooter segment.
Domestic sales
Scooter sales in India grew 32.11 per cent during the April-September period at 21,90,351 units this fiscal against 16,57,920 units in the year-ago period.
In the first half of the ongoing fiscal, Hero MotoCorp had posted a growth of 5.52 per cent in scooter sales at 3,52,330 units against 3,33,889 units in the same period last fiscal.
Sud said that the company’s domestic scooter sales did not reflect the actual growth as Hero MotoCorp had committed its capacity to execute a one-time export order of 45,000 units by the beginning of November.
Production capacity
Seeing further growth in the scooter segment, the company would be enhancing its scooter production capacity.
“Currently we have a capacity to produce 80,000 units per month, which we are scaling up to one lakh units by January 2015. The consideration is to take it to 1.35-1.5 lakh units in the mid-term,” Sud said.
He said the one lakh scooters capacity would come from the existing plants of the company.
“When we increase it to 1.5 lakh units a month, it could also include the scooter capacity from the upcoming plant in Gujarat,” Sud said.
Currently, Hero MotoCorp produces its scooters from Gurgaon and Dharuhera plants.
Sales growth
He said scooter penetration in India is expected to increase to around 32-33 per cent from the current 27 per cent. Scooter sales growth has been urban-led where the penetration is 40 per cent, which can go up to 45 per cent.
The company has a total two-wheeler production capacity of 7.65 million units annually from its plants at Gurgaon, and Dharuhera in Haryana, Haridwar in Uttarakhand and Neemrana in Rajasthan. By next year, it would add another 1.8 million units annually when its fifth plant at Halol in Gujarat becomes operational.
The company is planning to set up its sixth plant in Andhra Pradesh.