A significant chunk of Hero Honda’s Rs 350 crore capex plans for this year will go to part of their two key areas––IT initiative and the shift from furnace oil to gas as a source of power.
The new IT initiative, which is the dealer management system, will be rolled out from October. This is to tie up all its dealers nationwide and to keep a track of inventory and also to check the sales trend of each and every model in every corner of the country. The other area where about Rs 80 crore will be invested is the shift from furnace oil to gas as a source of power.
According to sources, there will be a ban on the usage of furnace oil as a source of power in the NCR region because of which Hero Honda signed a long term agreement with GAIL to supply gas.
However more importantly in the market front, Hero Honda says that it is on course to meet its annual target of 4 million units. In fact, in the first quarter it sold 1.1 million and second quarter it may exceed that. In the senior management meet later this month or early October they may revise the target.
Ravi Sud, CFO of Hero Honda, speaking on the company’s outlook as far as the annual sales is concerned, said, “We have set a target of 4 million units. In the first quarter, we have already done 1.1 million units, in the second quarter we are likely to do much better that what we did in the first quarter. So 4 million units’ target is well on track.”
