The $3-billion conglomerate Hero Group is making a foray into electric three-wheeler segment, expanding its core portfolio of bicycles and two-wheelers.
The group is expected to partner UK-based Ultra Motor, its technical collaborator in electric bicycles and scooters, in its three-wheeler venture. It is likely to launch the new vehicles either by the end of the year or early next year.
"Currently we are testing the prototype of three-wheelers developed by Ultra Motors in Indian conditions and it will take another six months," Hero Cycles managing director Vijay Munjal said, adding the company was looking at both goods and passenger carriers.
The group, which has so far invested about Rs 50 crore (Rs 500 million) on the new facility for electric vehicles in Ludhiana, could expand it further for the three-wheeler venture as well.
Munjal, however, declined to comment on the proposed investments.
Ultra Motor chairman Ian Woodcock said the company has the three-wheeler technology market-ready and it could be rolled out by late this year or early 2008.
Asked about the partnership with Hero Group for the new venture, he said: "We already have an existing relationship with them and it makes sense to extend it further."
The electric two-wheelers, which would be marketed under the brand name 'Hero Electric', come at a price range of Rs 15,000-Rs 20,000 for bikes and Rs 24,000- Rs 28,000 for scooters.
Under the technical collaboration with Ultra Motors, Hero would assemble, manufacture and service the electric vehicles, whereas the former would provide the electric vehicle technology, besides providing marketing support.
Asked if there was a possibility of the two partners extending their relationship to four wheelers, Hero Corporate Service chairman Sunil Kant Munjal declined to comment.
The group has been, however, reported to have shown interest in entering into the four wheeler category as well.
"Currently we are focussing on what we are doing and that is the electric two wheelers, which we consider has a great potential in India," Munjal said.
According to an AC Neilsen Study, light electric vehicles have the potential to touch 200,000 units in 2007-08, which with awareness could jump to 500,000 units by 2008-09.Hero plans to roll out the LEVs in North India during the first quarter of this calendar year and then gradually expand to West by Q2, South (Q3) and East and Central India in the fourth quarter.