Hero Cycles chief says growth in India is limited, wants PLI scheme for his industry
Pankaj Munjal of Hero Cycles has called for government support to step up the use of bicycles in India. Munjal, dismayed at government’s apathy towards the sector, said that this impacts the company’s business in India despite being successful globally.
“The post-Covid period was an eye-opener for me and the company. The world responded to it very nicely. Cycling lanes have come up. Cities are being decongested. Urban mobility is changing permanently. But in India we are back to square one. We are caught in a trap,” Munjal said.
The company plans to double sales from Rs 420 crore a month to Rs 800 crore by 2023, but Munjal feels that a large part of that business will come from UK and Europe.
“In India we’ve seen that growth potential is capped. The market size is decent and growing, but in single digits. But abroad, the company is a different DNA. By September, we will take orders for 2023. So here for the international market, we are doing a two-year forecast. After Covid, we are now thinking like German carmakers. Demand forecasting, supply chain response, safety standard–we are now like an auto company while operating in international markets,” Munjal says.
The businessman, who is the cousin of Pawan Munjal and Sunil Kant Munjal, promoters of India’s largest two-wheeler maker Hero MotoCorp, says the government should develop a production-linked incentive scheme for the bicycle industry and some cut in taxes. PLI announced for different sectors like electronics aims to boost domestic manufacturing through incentives.
“We have a design studio in Manchester. We have engineering in Berlin and manufacturing in India. Hero is ready to dominate the world with a little support from government,” he said.
The company allocated Rs 1,000 crore for expansion. About Rs 350 crore has been spent for first phase of production, and Rs 350 crore will be spent in Europe.
Post Covid, the government, taking lessons from a dip in use of public transport, had envisaged an increase in cycling. In a three-pronged strategy for re-opening metros in the short, medium and long-term, the Ministry of Housing and Urban Affairs, it emphasised the opportunity for encouraging bicycling and pedestrians. The advisory stated that roughly 16 to 57 per cent of urban commuters are pedestrians and 30 to 40 per cent use bicycles in the country.
But Munjal is not satisfied with the policy response.
“It’s just not happening in India. It just remains a vision statement. There is no vision statement or milestone. We don’t see any intent. India should really think where it wants to head–300,000 more cars in a year in Delhi or a cleaner city,” he said.