Hero Electric to invest Rs 700-mn for capacity expansion

New Delhi: Hero Electric, a subsidiary of the Hero Group, said it would invest around Rs 70 crore to expand its electric two-wheeler production capacity at Ludhiana, in view of the current policy incentives.

The company said it would double capacity to 440 vehicles per day on two shifts from the current level of 220 vehicles in a single shift. It would also be launching a new model in the high-speed segment in August. Hero Electric is targeting sales of over 70,000 vehicles this year as compared with 21,000 units sold last fiscal. It plans to expand its marketing network by adding almost 100 more dealers to the existing 170 by 2008-end.

“We welcome these initiatives. The tax benefits will give a much needed boost to vehicles that are not only more environment-friendly but also meet the need of the times. Fuel costs are climbing rapidly making the running cost of petrol driven two-wheelers out of reach for many customers,” said Mr Naveen Munjal, Managing Director.

The Delhi Government has recently announced a 15 per cent subsidy on the base price of the electric vehicle and a 12.5 per cent exemption of VAT. This translates into a subsidy of 24.5 per cent on the ex showroom price of the electrical vehicles. At present, Hero Electric offers four models in the range of Rs 15,170 and Rs 24,600.