International Dealer News IDN 114 Aug/Sept 2013 | Page 9

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Hero MotoCorp embarks on US and European expansion plans

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AVING agreed what was termed a “strategic alliance” some 18 months ago, the ties between Erik Buell’s post Harley-Davidson enterprise Erik Buell Racing (EBR) and Indian motorcycle manufacturing giant Hero MotoCorp have deepened. In what is described as their first ever equity partnership with an overseas company, Hero has taken a 49.2 percent stake in the share capital of Troy, Wisconsin based EBR, in return for a $25m investment. Hero, the world’s largest motorcycle and powered two wheeler (PTW) manufacturer by volume, are targeting total annual sales of 10m units in the next few years, and are making the EBR investment through their newlyincorporated and wholly owned American subsidiary HMCL (NA). When their initial relationship with Erik Buell was unveiled, Hero made no secret that it was looking to add design and engineering pedigree that would allow it to become a player on the global (and in particular North

American and European) large displacement stages, with ambitions to enter multiple motorcycle segments with a number of different platforms. Mr Pawan Munjal, Managing Director and Chief Executive Officer of Hero in India said of the EBR deal that the equity partnership is “reflective of our long-term vision of transforming Hero MotoCorp into a truly global twowheeler major with footprints spread across continents, offering a wide range of technologically-advanced two-wheelers.” e went on to say that this was “a natural extension of our existing relationship with EBR, which is going to further strengthen our strategic alliance. “As we go on spreading our footprint in new international markets, we will look at having extended centers of our own R&D at multiple locations around the world, developing two-wheelers for our global customers. “Our evolving relationship with

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EBR is an initiative in that direction.” Hero will now have two directors and one observer on the board of EBR, but the company says that there “will be no organisational changes at EBR” and that “Mr. Erik Buell will continue to be its Chairman and CEO.” In addition to its new subsidiary in the United States the company has also recently established a wholly owned European subsidiary in The Netherlands. At present EBR is noted for its limited number production of the acclaimed and multi-award winning 1190RS - an aluminium-framed liquid-cooled v-twin 1190RS superbike that they launched in 2011. Weighing in at under 400 lbs, the 1190 RS retails in the US for $39,999 and up, and delivers 175hp from its 72.6 cu. in/1190cc power-plant - an engine which is basically a bored-out Buell design based on the 72 degree 1125cc Helicon engine made for Buell by Bombardier’s Rotax engine

manufacturing subsidiary in Austria. rom Hero’s perspective Buell brings much to the table of their ambition - one of the world’s most respected chassis and performance engineers, the background Beull has of trying to launch several new bikes (such as the Buell Barracuda B2) and enter new market sectors with the Buell brand (such as the dirt bike market with a planned 450cc engine also by Rotax) provides Hero with access to the contacts and contracts of an industry player with a proven ability to develop and produce multiple platforms. Indeed, given his experience with Harley-Davidson’s air-cooled Sportster engines, the international industry rumours include speculation that dirt bikes and the relative simplicity of air-cooled v-twin cruiser platform manufacturing may be early initiatives en-route to performance street bikes. Either way, the collaboration will clearly enable the Indian company to broaden its manufacturing competencies and play catch-up with the international initiatives already taken by its principal domestic rivals Bajaj Auto and TVS Motors both of whom (coincidentally?) also choose The Netherlands as the base for their European corporate structures. www.heromotocorp.com

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