As per the recent updates, Hero Electric has decided to go ahead with its planned investment under the capacity expansion programme even though a slowdown in demand has been experienced in the domestic market.
The Managing Director of Hero Electric, Naveen Munjal, told Economic Times in an interview that although the demand for the electric vehicles was subdued in the first half of the ongoing financial year, the company is hopeful about witnessing a pickup in demand with the legacy player such as Bajaj Autos entering the segment.
The brand notified about its plans to invest INR 700 crores in the coming three years in order to be able to develop new products, expand dealer network and increase production capacity to retain a leadership position in the segment. They also reported that the resources will be raised through a mix of internal accruals and external capital.
The Managing director said in his statement, – “To start off, the first few months were kind of slow because of the new policies which came into play… the new homologation norms (under Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India or FAME-II scheme). But now we are back on track. We will grow (over last financial year)”.
He explained that the entry of Bajaj Autos in the segment is a positive signal. He added to his statement by saying – “Larger players coming means that the time has come, or is coming, for the internal combustion engine (ICE) two-wheelers to start converting. When you talk of ICE converting, you are looking at 20 million units converting over a period of time. Now it is anybody’s guess whether it will happen in five or 10 years but the market will start to expand very, very quickly.”
Around 52,000 electric two-wheelers were sold in India between the month of April and September this year and Hero Electric accounted for nearly half the sales.