New Delhi: Hero Motors Co., the parent of cycle maker Hero Cycles Ltd, is looking for acquisitions in the US and Germany to expand its e-bicycle business across developed economies, said Pankaj Munjal, managing director at Hero Motors Co.
“We are looking for acquisitions in US and Germany and have kept aside ₹300 crore for the future. The rest of the funding will be down through debt and equity. We will continue to invest in e-bicycles and technology related to the clean energy in the future," Munjal said in an interview.
In the auto component sector, the Delhi-based company is looking for an acquisition to secure technology for developing electric powertrains which can be supplied to electric vehicle makers in developed markets like Europe, Munjal said.
As of now, the company is focused on setting up a cycle manufacturing base in Punjab known as the ‘Cycle Valley’ where manufacturing will start from October 2020. Hero Cycles had invested around ₹250-300 crore in the project.
In order to tap into the growing market for e-bicycles and premium bicycles across the globe, Hero Cycles will also focus on making high-end components for such bicycles through joint ventures with some foreign companies.
Munjal said the company will try to cater to the global markets from its manufacturing base in Punjab. He said US-China trade war has opened up new opportunities for Indian companies and Hero will try to take advantage of that in the future.
This fiscal year, the company is expected to cross the 5 million sales mark for the second consecutive year despite demand in the domestic markets being weak since September. In the next few years, Hero Motors expects its bicycles and automotive component manufacturing business to generate annual revenues of up to ₹2,000 crore, each.
“Our bicycles business has grown by almost 20% this fiscal year. In the component manufacturing business, we are looking for an acquisition in the electric technology space since that is the future. We are taking to a company in Europe and if this comes through, then the whole growth trajectory of the company will take a new shape," said Munjal.
Hero Cycles currently exports a significant chunk of its bicycles from its manufacturing base in Sri Lanka. The company exports around 16,000 units to 18,000 units each month from the island nation and is looking to invest in another facility in the near future as the current one is running at optimum capacity utilization rate.