Hero MotoCorp to Spend Rs 1,000-1,200 Crore for Capital Expenditure
Hero MotoCorp has issued Rs 1,000-1,200 crore for capital expenditure this fiscal year, CEO Niranjan Gupta said to investors that, “Last year, our investment in Research and Development (R&D) was around 2.2% of our revenue. We’re maintaining an upward trend in R&D spending, so you can expect continued growth in our investment as we advance our technology”.
While the company has not mentioned how it will use this capital expenditure, it has indicated plans to introduce new products across its premium motorcycle, scooter, and electric vehicle (EV) ranges this year. Gupta mentioned that last year saw several new launches in the premium segment, and this year will see the continuation of this trend with additional models.
Significant developments are also anticipated in the scooter segment, both for internal combustion engine (ICE) and electric models. Hero MotoCorp is intensifying its focus on the electric vehicle market with its Vida brand, planning to expand its lineup from two to four models this year. One of these new electric scooters is expected to be budget-friendly, while another will cater to the mid-range segment.
Gupta pointed the strength of their 125cc model lineup, which are Glamour, Super Splendor, and Xtreme 125, and noted that the aim will be on increasing production capacity and enhancing market share each quarter. The company also anticipates high demand for the newly launched Xtreme 125R in the 125cc motorcycle segment during the festival season. Hero MotoCorp plans to increase the production capacity of the Xtreme 125R from 25,000 units per month to 40,000 units in the upcoming months.
In the entry-level segment, Hero MotoCorp launched an updated Passion model in the 100-110 cc range last year, which helped sustain its market share. Earlier this year, the company announced an investment of up to Rs 600 crore by 2025-26 for establishing a Global Parts Centre in Tirupati, Andhra Pradesh. This new center will complement their existing parts center in Neemrana, Rajasthan, which currently has a full storage capacity of up to 26,000 SKUs.
The company leads in both the internal combustion engine and electric vehicle segments, with a strong importance on R&D. Hero MotoCorp is committed to growing its portfolio and improving production capacities to meet developing consumer satisfaction. The company is India’s largest two-wheeler manufacturer, known for its innovation and wide product range.