Hero MotoCorp plans to spend more than Rs 1,500 crore in FY27 to expand manufacturing capacity, with a focus on scooters and electric vehicles, Chief Executive Officer Harshavardhan Chitale said.
The company aims to double scooter production capacity as demand rises for models such as Destini and Xoom. Hero MotoCorp is currently clocking monthly scooter volumes of around 60,000 units and sees scope to move closer to 1 lakh units, Chitale said during an analyst call.
The investment forms part of the company's wider expansion strategy as it looks to increase production across internal combustion engine scooters and electric vehicles while strengthening its parts business.
"We are investing in capacity expansion, and we have committed over Rs 1,500 crore of capex in FY27. And this capex is going to expand our capacity in scooters, where for some of our models that are doing very well, we are doubling our capacity," Chitale said.
Scooter expansion
Chitale said Hero MotoCorp has already increased production capacity for the Destini scooter by 50%.
"We are in the process of doubling our Xoom capacity," he said. In the electric vehicle segment, the company is nearing completion of an expansion that will increase production capacity by 50% from the previous quarter, he said.
"The company has gone from 15,000 units to 25,000 units and will further double that capacity before the end of this year," Chitale said.
Parts centre plan
Hero MotoCorp has also committed more than Rs 700 crore to build a global parts centre in South India to support growth in its parts and accessories business.
"We are also making significant investment in building up a second parts center, which is going to help in further expansion of our parts and accessories business. We have committed over Rs 700 crore of investment in building out a global parts center in South of India," Chitale said.
Demand watch
On demand trends, Chitale said momentum continued through April and the first week of May despite concerns linked to the conflict in West Asia.
He said the two-wheeler industry had expected high single-digit volume growth in FY27 before the conflict, but added that the evolving situation would need monitoring because of the uncertainty it may create.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
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