On the road to becoming an integrated engineering solutions supplier, this Hero Group company has already lined up contracts worth Rs 1,500 crore for the next five years.
NEW DELHI: Hero Motors may have got out of the moped business, but many new ventures are being lined as part of a massive expansion drive.
On the road to becoming an integrated engineering solutions supplier, this Hero Group company has already lined up contracts worth Rs 1,500 crore for the next five years.
Managing director Pankaj Munjal has been talking of taking the company public next year, but he appears to have already put in place an aggressive plan to enter new businesses.
Sample this: Hero Motors has signed up Japanese company Sumitomo Corp for a joint venture to make disc brakes. The JV is setting up a manufacturing unit at Manesar at an investment of Rs 100 crore and a formal announcement is expected soon.
Hero has also signed a separate 50:50 JV with Power Plate International for supplying fitness equipment across the country.
That’s not all. If reports are to be believed, the company is also in talks with Japanese truck and engine maker Isuzu Motors for accessing technology. The Hero Group (which comprises bike major Hero Honda and several other companies, besides Hero Motors) has already indicated its interest in the four-wheeler space, but it is still not clear whether the group wants to make passenger vehicles or is more inclined to consider commercial vehicles. Hero Motors’ parleys with Isuzu could signal the group’s entry into four- wheelers some months down the line, but this could not be confirmed.
When asked about the group’s four-wheeler foray, managing director Pankaj Munjal declined to comment. In a faxed response from Tokyo, an Isuzu spokeswoman denied reports that her company was in talks with any arm of the Hero Group.
It is interesting to note that Sumitomo Corp and Isuzu are already associated in a technology-transfer relationship in India through Swaraj Mazda Ltd (SML) - in which Sumitomo is one of the promoters and the partner responsible for bringing Isuzu to SML some months back.
Since Sumitomo is at loggerheads with the second promoter of SML, Punjab Tractors, over board control, it is possible that Isuzu may be tempted to consider partnering the Hero Group.
The Isuzu spokeswoman, meanwhile, said her company had no plans to either dissolve technical collaboration with SML or take equity stake in SML.
Hero Motors already has an engine transmission business which supplies Bombardier Recreational Products (BRP), which makes the Ski-Doo snowmobile and BMW Bikes besides the sheet metal business and assembly of vehicles such as lawn mowers. The company clocked a turnover of Rs 330 crore last fiscal.
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