Hero Group Readying For Motorised Cycles Launch

New Delhi: | Updated: Sep 17 2003, 05:30am hrs
The $1.8 billion Hero Group is readying to launch motor-fitted bicycles by January 2004. The group has also identified automotive parts as its new thrust area, following its big investments in IT and IT Enabled Services.

Speaking to The Financial Express, Hero Corporate Services Ltd managing director & CEO Sunil Kant Munjal admitted that the motor-fitted bicycle project (internally called Cyclomoto) was taking more time than initially anticipated and added that the group would roll out the new product in next four months.

Were currently testing the product (motorised bicycle) with special emphasis on making it affordable to the masses, said Mr Munjal.

Even as the group launches novel products, it is betting big on two fast emerging areas. Mr Munjal said that IT Enabled Services where the group has already invested approximately Rs 100 crore and auto-components would be major thrust areas for the group. Mr Munjal said that press components, welded components and process-specific auto components are the products where the group has already started working.

Under the Cyclomoto project, the group plans to offer bicycles fitted with 25-cc motor engines. The group was earlier aiming at a price-range of Rs 5,000-Rs 6,000 per motorised bicycle. Once the project is commercialised, the group plans to address the vast bicycle market with standard 25-cc engine kits (which could be fitted on existing bicycles) as well as completely motor-fitted bicycles.

In test conditions, the product is likely to give fuel efficiency of 80km per litre and a maximum speed of 20 km per hour. The engine for the product is being designed by group subsidiary Hero Global Design.

Hero Group includes 18 companies and is the largest manufacturer of two-wheelers and bicycles in the world.

But the product category where the group has taken a hit is mopeds and step-thrus, which are manufactured by its subsidiary Majestic Auto.

So, is the group contemplating exit from mopeds No, said Mr Munjal. We will maintain our moped portfolio there is still a demand for it, but we will increasingly broaden our thrust on automotive components.

Mr Munjal added: We will grow the existing auto-component business to do larger volumes. We started with catering to our group companies to gradually servicing the vast domestic spare parts market. Now we are looking at major exports market. Moped-maker majestic Auto has recently broadened its product portfolio to include health care components also like Hero Jogger, Hero Stepper and Hero Allgero.

The groups presence in auto components is through subsidiaries like Munjal Showa Ltd (shock absorbers), Satyam Auto Components (sheet metals and fabricated components), Sunbeam Auto (castings), and Munjal Auto Industries (auto parts).