Hero Electric Seeks Funding To Expand Production Five-Fold, Says MD Naveen Munjal
Hero Electric is planning to raise funds to increase production of its electric scooters five-fold, Managing Director Naveen Munjal said on Sunday.
The company is looking at an investment of about Rs 700 crore over the next three years to increase production to 5 lakh electric scooters per year from about 1 lakh per year at present.
"In every aspect we are expanding. There is no looking back for us... We are expanding in terms of dealer network, manpower, product portfolio and manufacturing... We will invest and also raise funds for the same," Munjal said.
Hero Electric is currently working out the quantum of funding it needs, he said.
"We already have external investor. So either that external investor puts in or we get another investor, I'm not sure right now. We have to still work on the details," Munjal said, adding that over the next couple of years Hero Electric would require susbstantial investments, especially in manufacturing.
Alpha Capital is the investor in Hero Electric outside of the Munjal family.
"We will have to do a minimum of around Rs 500-700 crore for different applications, and a large part of it will go into manufacturing, product development, R&D and marketing,” said Munjal.
These investments will help in supply chain, dealer network, training and upgradation of dealer network, besides ramping up production capacity, he said.
"This year we are going to be almost one lakh (annually). In the next three to four years we want to be at least half a million," said the managing director.
Hero Electric will align its expansion drive depending on how the government’s electric vehicle policy shapes up and how FAME-II is fine-tuned to address a wider segment of lower-priced electric two-wheelers.
"This half a million (capacity) can go up much faster. If we find that the India EV policy is indeed moving the direction the government and Niti Aayog are talking about, we may have to accelerate (production) this year itself, and that scale may go up even higher,” said Munjal.
As part of its expansion plans, Hero Electric is aiming to increase the number of its dealers across India to 1,000 by 2020 from around 600 at present.
In terms of products, Munjal said Hero Electric at present offers four models and their variants. "We could be introducing more products in the next year...some products will get upgraded and some products will get phased out... At any point of time we will have five to seven products and variations below them," Munjal said.