Hero Cycles seeks govt support amid component shortage, supply chain issues

Hero Cycles on Thursday sought government support for uninterrupted supply of components as well as help in localisation of high-end parts for bicycles and e-bikes in the country amid various disruptions.

File image: Hero Lectro (Representational image)
File image: Hero Lectro (Representational image)

The Covid-19 pandemic has triggered a significant demand surge for bicycles and e-bikes across the world, including in India, as people look for safer, personalised, and eco-friendly transport options, however, the shortage of raw material and components has meant that bicycle manufacturers are struggling to fulfil the surging demand, Hero Cycles said in a statement.

The supply chain disruption in the aftermath of the pandemic, restrictions on Chinese imports, and the freight train obstruction in Punjab have resulted in a severe shortage of raw materials and inputs for the bicycle sector, it added.

"While on the one hand, we are witnessing a surging demand for bicycles and e-bikes; on the other hand, shortage of raw material and components is turning out to be a major hurdle for all bicycle manufacturers in India. This has resulted in increased waiting times for customers, particularly for high-end bicycles," Hero Motors Company (HMC) Chairman and Managing Director Pankaj M Munjal said.

Also Read : Hero Lectro launches F6i smart e-cycle with detachable battery at 49,000

Hero Cycles, with a manufacturing capacity of 60 lakh units per annum, is part of the HMC group. In this situation, the company urges the government to provide active support to the bicycle sector to be able to overcome these challenges, he added.

"Firstly, we need all freight train movement to Punjab to resume completely, allowing us access to raw materials. Secondly, the bicycle sector needs government support in localising component manufacturing and reducing dependence on foreign supplies, particularly from China," Munjal said.

Estimates suggest that India imports bicycle parts worth over USD 70 million annually. In recent years, the country's bicycle industry has come to rely heavily on China for imports of components and high-end parts.

Diversifying supply lines and establishing a strong localised component manufacturing sector should be a top priority for the bicycle industry in the current climate, Munjal said.

"The government must support this endeavour initially through fiscal and non-fiscal measures until the sector develops robust manufacturing capacity of its own. A favourable duty structure and support for R&D and innovation is key," he added.

The government must also create a conducive and business-friendly environment and ensure ease of starting and conducting business to attract global component manufacturers to establish facilities in India, Munjal noted.

First Published Date: 31 Dec 2020, 17:58 PM IST
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