Hero MotoCorp Accelerates Growth with New Assembly Plant in Nepal

India's leading motorcycle and scooter producer, Hero MotoCorp, announced on Monday that they have designated Chaudhary Group (CG) Motors as their distributor in Nepal. Moreover, they are building a cutting-edge greenfield facility in Nepal to assemble products with an annual capacity of 75,000 units. The facility will commence operations in March 2024, ushering in new investments and generating employment opportunities. It is slated to be constructed in the Nawalpur district, as per the company's statement.

Hero MotoCorp entered the Nepalese market in 2014 and has since cultivated a strong presence by offering popular brands such as Super Splendor and Xpulse 200 motorcycles. The company considers the Nepalese market as one of its primary markets in Asia.

Chaudhary Group is a renowned business leader in Nepal, overseeing a network of more than 160 companies and 123 brands globally. A dedicated workforce of over 15,000 employees supports their multifaceted operations spanning fast-moving consumer goods (FMCG), financial services, energy and infrastructure development, hospitality, and electronics sectors.

Sanjay Bhan, Head of Global Business at Hero MotoCorp, expressed confidence that Chaudhary Group's extensive expertise would significantly bolster their operations in Nepal. He reiterated the company's commitment to catering to its Nepalese clientele with superior products, services, and experiences while unveiling plans to reinforce its national presence and introduce numerous innovative products shortly.

In Nepal, Hero MotoCorp boasts an extensive product range - from entry-level to premium two-wheelers - including Xpulse Twins (Xpulse 200 and Xpulse 200T), Xtreme range (Xtreme 160R and Xtreme 200R), Splendor range (Super Splendor and Splendor+), Glamour, and HF Deluxe motorcycles. Apart from these offerings, their scooter lineup features models such as Destini 125, Maestro Edge, and Pleasure+.

Significance of the Development:

The establishment of Hero MotoCorp’s assembly plant in Nepal holds great implications for both the corporation and the country. Several crucial aspects need to be considered:

Pertaining to Hero MotoCorp:

• Market Growth: Nepal, being a country with a young and mobile population, it is an opportunity market for two-wheeler vehicles. This facility enables Hero MotoCorp to target this potential and expand its presence in the region.
• Expense Reduction: The cost of local assembly might be lower than importing motorcycles because of cheaper labor costs and lack of duty charges. As a result, Hero MotoCorp’s regional profitability may improve.
• Tailoring: The fact that the company has a local assembly plant helps it to better adapt its products to the needs and preferences of Nepalese customers.
• Brand Strengthening: Reinforcing its position in the Nepal market could help Hero MotoCorp reinforce its brand image and retain regional dominance in the two-wheeler industry.

Concerning Nepal:

• Economic Development: The assembly facility will provide new employment opportunities, both directly at the plant and indirectly through associated industries, thus promoting economic development and lowering the rate of unemployment.
• Knowledge Transfer: The acquisition of Hero MotoCorp’s expertise and technology by Nepal could be beneficial for the latter in terms of skill development and improved technological capabilities.
• Increased Foreign Investment: The investment made by Hero MotoCorp could also attract other foreign firms to invest in Nepal, which would result in the growth of its economy.
• Domestic Production: Reduced costs for motorcycles manufactured in Nepal might lead to enhanced affordability and better availability of personal transportation options among the customers of Nepal.

Other Bike Assembly Plants in Nepal:

Besides Hero MotoCorp, other Indian motorcycle brands have also set up assembly plants in Nepal to address the rising need for two-wheelers. Here are some key players:

• Bajaj Auto: Bajaj, one of the earliest entrants into the market, is equipped with a modern assembly plant in Ramgram, Nawalparasi. They concentrate on producing the most popular ones such as Pulsar, Platina, and Discover to serve the price-conscious market.
• TVS Motor Company: It is building an assembly plant in Simra, Bara and the factory will be operational soon. They plan to manufacture popular models such as Apache and Scooty Pep+ to compete in the premium and mass markets.
• Royal Enfield: In June 2023, Royal Enfield opened an assembly plant in Nepal with Triveni Group. This plant is in Birgunj and has an initial assembly capacity of 20,000 units per year targeting the popular models such as Classic 350 and Meteors.