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Hero Cycles, India’s largest bicycle maker, is in talks with an e-cycle maker from Slovakia to set up an international manufacturing base as it looks West eyeing sales of half a million electric bicycles in the next two years and become a leading player in the segment and generating a bulk of its revenue from sales in Europe.

The company is in an advanced negotiation with a Slovakian bike maker for a partnership or an alliance which will give the company a footprint to cater a very significant demand emanating out of Western Europe, especially post Covid.

“If you look outside, that’s where the whole e-cycle market is, and it is growing. The e-cycle has become the second car,” said Pankaj Munjal, CMD, Hero Cycles told ET. “I have packed my bags with a one-way ticket.”

The company claims its capacity is already sold out for 2021 and it is already securing orders for 2022-2023 already for the international markets and the new facility in East Europe will help the company meet this demand.

The company hopes to sell 150,000 units of electric bicycles this year and ramp it up to 500,000 by next year.

Munjal said Hero Cycles is already generating about Rs 400-600 crore of turnover from the overseas market, which is likely to grow by 50% in the coming two years, thanks to strong order book coming out of Europe.

The company has lined up an investment of Rs 1,000 crore towards its e-bicycle plans with Rs 350 crore of that going towards its new plant in Ludhiana which will offer the capacity to make 10 million units annually, said Munjal. Another Rs 350 crore will go towards overseas acquisitions, setting up distribution channels, marketing and brand building and the rest will go towards vendor development.

With Western Europe as its target market, the company has set up a design centre in England and an R&D base in Germany and will be investing £15 million (Rs 154 crore) more this year towards product development. The immediate focus is to cater to the Indian and European market before it branches out to other global markets.

Interestingly, Munjal claims that the East European countries have a much better cost structure than India, especially on the electric bike front.

“India is not competitive right now, so we will import from Slovakia. But we have a roadmap to localise production here,” the Hero Cycles boss said.

Back home, an affordable electric bike priced below Rs 10000 is at the last stage of development and Munjal is banking on support from the government under its production-linked incentives (PLI) scheme to bring down its costing in India and become more competitive internationally.

Hero Cycles meets all the criteria outlined in the PLI scheme, he said.