Hero Electric, a wholly-owned subsidiary of Hero group and India’s largest manufacturer of energy-efficient, environment-friendly electric two-wheelers, has decided to double its production capacity to 440 units a day by introducing second shift.
The firm is targeting sales of over 70,000 vehicles this year, a more than three-fold increase from the 21,000 units sold in the last fiscal. It plans to expand its network of dealers across the country, adding almost 100 more dealers to the existing 170 by 2008-end, the company sources said in Chennai. The company will also invest Rs 70 crore in expansion initiatives that involve upgrading and enhancing capacity at its Ludhiana plant, increasing product range, and stepping up research and development. In addition to a new R&D facility already coming up in Delhi, Hero Electric has also set up a Design Cell focusing on innovation that will enhance style as well as improve performance. It is set to launch a new model in the high-speed segment in August 2008, the sources added.
Within a year of its operations, Hero Electric has achieved sales of over 20,000 electric scooters with its aggressive dealership expansion and marketing efforts. The company hopes that the increasing fuel cost may force customers to switch over to electric two wheelers in days to come. The company also expects that, following Delhi government, other state governments will also give enough subsidy to encourage the sale of pollution-free, environment-friendly electric two wheelers.
Accordingly it has proposed to double its per day capacity to 440 units, the sources added. Recently, the Delhi government, to mitigate the rising fuel prices and promote eco-friendly, non polluting means of transport, has announced a 15% subsidy on the base price of the electric vehicle and a 12.5% exemption of VAT. This translates into a subsidy of 24.5% on the ex-showroom price of the vehicles.