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Hero Honda again mulls third plant

July 22, 2003 18:19 IST
Last Updated: July 22, 2003 18:31 IST


Buoyed by growing sales and good monsoon, India's biggest motorcycle maker Hero Honda Motors is again considering setting up a third plant.

"We are looking at the feasibility of our third plant. We will also maintain sales momentum during the second quarter of this fiscal even though the period has not been traditionally good for sales," Brijmohan Lall Munjal, chairman, Hero Honda Motors told PTI in New Delhi on Tuesday.

The company had earlier put on the backburner its plans of establishing the third plant as motorcycle sales decelerated during the fourth quarter of the last fiscal.

Motorcycle sales, which went into overdrive during the better part of 2002-03, hit a speed breaker during the later part of the last fiscal, mainly due to deficient monsoon, petrol price hike and the value-added tax regime imbroglio.

The two existing plants of the company were producing 2.2 million motorcycles, which could go up to 2.4 million units, Munjal said.

Hero Honda manufactures motorcycles like 100cc Splnedor, CD Dawn, CD100cc, 110cc Passion, 223cc Karizma and CBZ at its Ballabhgarh and Dharuhera plants in Haryana.

In terms of sales, June and July are considered weak while sales pick up in September with the advent of the festival season, Munjal said, adding that sales during the second quarter of the current fiscal would not slide.

Hero Honda reported a 13.4 per cent growth in net profit to Rs 157.82 crore (Rs 1.58 billion) during April-June 2003 over Rs 139.16 crore (Rs 1.39 billion) for the same period last year.

Net sales surged by 5.37 per cent to Rs 1,359.82 crore (Rs 13.59 billion) during the first quarter of this fiscal as against Rs 1,290.40 crore (Rs 12.90 billion) for the corresponding period last fiscal.          

The company posted a 14.2 per cent sales growth to 157,000 units in July 2003 over 138,000 units sold in the same month last year.

The cumulative (April-June 2003) sales surged by 18.2 per cent to 453,000 units when compared with 418,000 units for the same period last year.

The Munjals-owned Hero group and Japan's Honda Motor Company own 26 per cent stake each in Hero Honda. The remaining stake is with financial institutions and the public.


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