Hero Motocorp To Invest Rs 3200 Cr In 3 5 Years In Andhra Pradesh On Capacity Expansion New Global Parts Centre

New Delhi: Two-wheeler market leader Hero MotoCorp will invest Rs 3,200 crore in Andhra Pradesh in the next three to five years to expand its operations in the state, including setting up a global parts centre and hiking production capacity at its Tirupati facility, according to its Executive Chairman Pawan Munjal.The company is setting up its second global parts centre (GPC 2.0) at Tirupati at an investment of Rs 750 crore that will also help in enhancing its accessories and merchandise business besides augmenting supplies of parts in other global markets, Munjal said in a select media interaction.The foundation stone for its GPC at Tirupati was laid on Wednesday. This will be the company's second GPC after its first GPC at Neemrana in Rajasthan.Hero MotoCorp had committed to scaling up investment in Andhra Pradesh, where it has already invested around Rs 1,600 crore, including a manufacturing unit in Tirupati in 2018, but further plans were delayed due to the COVID-19 pandemic.The company is recommitting its investment in the state with a fresh Rs 3,200 crore planned to be invested over the next three to five years , Munjal said. This will include the Rs 750 crore that we are investing in setting up the GPC 2.0 and also increasing the annual production capacity of the Tirupati plant, he added.The Tirupati factory currently produces ICE (internal combustion engine) and all of the company's electric vehicles. We have a large campus (and there is) a lot of scope for expansion. We currently have a capacity of about 0.6 million, (we are) taking it up to 1.2 million to 1.5 million units soon. Again, it will require substantial investment and generate substantial employment, Munjal noted.The expansion at Tirupati is expected to generate around 4,000 employment opportunities.The fresh investment aims to transform Tirupati into a world-class manufacturing and electric mobility hub, while strengthening Hero MotoCorp's global supply chain and reinforcing India's position in the automotive and EV ecosystem, the company said.On the rationale for enhancing investment in Andhra Pradesh, Munjal said the policies that the current state government under Chief Minister Chandrababu Naidu has put out for economy and for various industries are very conducive to more and more investment, very business friendly, which obviously brings us back into Andhra Pradesh for more, more investments .Commenting on the requirement for a second GPC, Munjal said considering the total number of vehicles that the company has sold over the years the requirement of parts only goes up with the age of the vehicle . We have serviced our customers very, very well so far with the Global Parts Centre out of Neemrana. Now we are at a point where it becomes imperative for us to set up one more parts centre again, he said, adding that the GPC at Tirupati will serve both domestic and international spare parts operations.On choosing Tirupati, Munjal said, We did not have to think twice where to go. We have a large campus in Andhra Pradesh, in Tirupati district, so we quickly took the call to put up the GPC 2.0. The new GPC, which is expected to be operational in two years will be much bigger and more sophisticated than the Neemrana centre, he added.One of the key aspects of the GPC 2.0 will be to cater to the company's growing ambition for increasing accessories and merchandising business, inspired by its partner Harley Davidson. (From) our current engagement partnership with Harley Davidson, we are learning more and more about accessories and merchandising. Harley Davidson is very big on these things, almost 30 per cent of their revenue comes from parts, accessories, and merchandising, so we are going to be upping our ante on accessories and merchandising, he added.While the GPC in Neemrana is already servicing the current set of dealers and consumers, he said, With the GPC 2.0 we are going to be increasing our accessories business and revenue. Munjal further said, Right now our accessories and merchandising business is very small. I'm not putting a number to it, but clearly we have decided to focus and grow this business... We do have plans to grow it really big, from where we are, it will be manifold. He further said completely knocked down (CKD) parts would also be exported from the Tirupati GPC to Hero MotoCorp's other global markets as well.Asked about the roadmap on the partnership with Harley-Davidson, Munjal said, Clearly, Harley is happy with what we are doing for them, and they are only increasing the size of the business with us. We have a number of products that we will be launching soon and then in the mid to long-term, there's a large number of variants and products in the pipeline. The company also announced a partnership with the Andhra Pradesh government to launch a merit-based scholarship program supporting technical education.