Hero MotoCorp to invest ₹1,500cr in scooter capacity expansion
What's the story
Hero MotoCorp, the leading player in the two-wheeler market, has announced a major investment plan for FY27. The company plans to invest ₹1,500 crore to double its scooter production capacity. This was revealed by CEO Harshavardhan Chitale during an interaction with analysts. The move comes as part of Hero's strategy to meet growing demand and expand its market share in the scooter segment.
Growth strategy
'That's our ambition': Chitale on scooter production target
Chitale said, "We are investing in capacity expansion, and we have committed over ₹1,500 crore of capex in FY27." He added that this investment would particularly focus on scooters. The CEO also noted that the company is currently running a monthly volume rate of around 60,000 scooters. When asked if doubling this figure was their target, he replied with confidence: "That's our ambition."
Capacity expansion
Increased production of popular models
As part of its capacity expansion plans, Hero MotoCorp has already increased the production capacity of its 'Destini' model by 50%. The company is also in the process of doubling the capacity for another popular scooter model, Xoom. These steps are part of a broader strategy to enhance production capabilities and meet rising consumer demand in India's competitive two-wheeler market.
EV growth
Plans to double EV production capacity
On the electric vehicle (EV) front, Chitale said that they are close to completing an expansion that will increase their capacity by 50% from the last quarter. He added that in a few quarters down the line, they plan to double this capacity further. The company has already increased its production from 15,000 units to 25,000 units and plans to double this before year-end.
Parts center
Investment in new parts center
In addition to the production capacity expansion, Hero MotoCorp is also investing heavily in a second parts center. Chitale said, "We are also making significant investment in building up a second parts center." This facility will help further expand the company's parts and accessories business. The CEO revealed that they have committed over ₹700 crore to set up this global parts center in South India.