Hero Cycles cancels Rs 900 crore trade deal with China

Hero Cycles_1  
In another major blow to China, Hero Cycles, one of India's leading bicycle makers has canceled an upcoming trade deal with China worth Rs 900 crore as part of boycott Chinese products campaign. Hero Cycles' Chairman-cum-Managing Director Pankaj Munjal announced on Friday that the company had shelved their plans as a commitment to boycott Chinese products. After snapping trade ties with China, the company is now looking for alternative markets while claiming that every type of bicycle manufacturing is possible in India.
Announcing cancellation of upcoming trade ties with China worth Rs 900 crores proposed in the next 3 months, the Hero Cycles MD Pankaj Munjal on Friday said that “ We used to buy from various parts of the world including China and import high-end bicycles. Now, we are designing them in our German R&D facility. “
Munjal stated that they have snapped trade ties with Chinese companies and are searching for new markets now. Germany is the top market which Munjal is looking as a substitute to China. He said that Hero Cycles is planning to set up their plant in Germany from where they can cater to the European markets.
While speaking with media persons, Munjal said that in the coming 3 months, Hero Cycles had to do business worth Rs 900 crore with China but those plans have been canceled now. Hero cycles had been importing parts of high-end bicycles and even complete high-end bicycles as well which are purchased by professional bikers or even by persons for recreational activities. The price of high-end bicycles in the market is from Rs 15,000 to more than 7 lakh as well.
Munjal added that “demand for bicycles has increased worldwide in the past few months and Hero Cycles is also increasing its capacity to cater to this increasing demand. “
Munjal added that Hero Cycles is planning to set up a plant in the European nation to cater to the continental market. The company has also announced ambitious plans for the Indian manufacturing market by saying that after the completion of Cycle Valley in Ludhiana's Dhanansu village the country will easily be able to compete with China. Besides a Hero Cycles plant, the cycle valley will also include ancillary and vendor units.
However, he admitted that small companies have suffered losses during the lockdown period. He added, “This is the reason that we have come forward to help them and hence are ready to provide them technical help so that they can start making high-end bicycle parts which are being imported from China.”
While mentioning that he had discussed losses suffered by small units with Punjab’s Industry Minister, Munjal said that he very recently also visited the site of Cycle Valley along with Ludhiana DC Varinder Kumar Sharma. Chinese companies had plans to invest in this valley which will focus only on high-end bicycles. The planned Cycle Valley is to come up in 100 acres of land at a cost of Rs 400 crores. Land acquisition has already been done.
After offering technical help to members of United Cycles Parts and Manufacturers Association (UCPMA) to reduce dependency on China, Munjal said “Once Cycle Valley at Dhanansu village of Ludhiana comes up, we can easily compete with China. If India can make the latest computers, why can’t we make hi-tech bicycles.”