Hero Honda inaugrated its third plant in the temple town of Haridwar yesterday. The company has two other manufacturing plants in Gurgaon and Dharuhera. The steel prices are on a rise but bucking the trend, Mr. Pawan Munjal, Managing Director Hero Honda indicated that they may reduce prices.

Speaking on the occasion Mr. Pawan Munjal told reporters “‘We are watching the situation. It could be either way round”

The two-wheeler industry in India is facing a downslide coupled with rising steel costs, this decision from Hero Honda can have a major impact on the market. But how can Hero Honda reduce prices when the input costs are on a rise? Well, the company intends to pass on the benefits from the Uttarakhand government’s 10-year rebate on exise duty and taxes to the end customer.

Hero Honda biggest rival Bajaj Auto already has a plant in the state.

“Once we offer lower prices for two-wheelers, others in the two-wheeler industry would be compelled to cut their prices” said a senior official of Hero Honda Motors

Responding to a reporter’s question, if this new plant will end up producing more than the demand Mr. Pawan Munjal said “‘The two-wheeler market in China is 20 million units per year, while in India it is only 8.5 million. We are very hopeful that the market would catch up soon”

The new plant is built on an area of 275 acres and its the largest green roof plant in the world claimed Mr. Munjal.

“Hero Hona is also looking at developing infrastructure in the town” Mr. Brijmohan, the Group chairman said.

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One Person has left comments on this post

» satya said: { May 14, 2008 - 07:05:52 }

yeh yeh. expect more & more passions to be outsourced.

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