Hero MotoCorp to launch 110cc entry bikes in US next year; Brazil entry in 2016

Written by Roudra Bhattacharya | Sao Paulo | Updated: Jun 13 2014, 21:36pm hrs
Hero SplendorHero MotoCorp plans to enter the US market in 2015 with its entry-level bikes and scooters in the 100cc to 125cc range like Splendor and Passion.
In a first for any Indian automaker,Hero MotoCorp plans to enter the US market in 2015 with its entry-level bikes and scootersin the 100cc to 125cc range likeSplendor and Passion. As part of its aggressive international plans,the Munjals-promoted company will alsoenter another key two-wheeler market - Brazil in 2016, whileat the same timestarting its first fully-owned overseas manufacturing plant in Columbia on a $70 millioninvestment.

Pawan Munjal,Hero MotoCorp'sMD & CEO told FE at the sidelines of the opening Ceremony of the FIFA WorldCup 2014 thatin the US the company will be distributing its products through Erik Buell Racing (EBR), its technology partner, after initially importing them from India.Hero had purchased a 49.2% stake inEBR, a niche sports bike maker, in 2013 for $25 million, and is likely to take its holding up further.

"Our products are already going through homologation in the US, and that takes a long time. There is usually a small window for launch, so while we have showcased our products at a motor fair alreadywe will formally launch only next yearsince we do not want to hit the market in the winter season," he said.

He added, "In the developed markets like the US, we are right now thinking of launching our current range of smaller displacement bikes, before we add the more powerful superbikes to our range in the future. Wefeel there is a marketfor such smaller bikes, especially in the cities,and wemightco-brand the product with EBR. In the future, we could raise our stake in EBR as well as the need arises".

Elsewhere, for theSouth American market, Hero has already started work on a $70 million manufacturing plantin Colombia, its first fully-owned factory overseasthat from next year will supply to most of the regiontill another factory inBrazil comes up at a later date. InBrazil,where it will start sales in 2016,the company is currently talking to potential partners fordistribution support.

"Initially, we will import our products to Brazil from Columbia.Brazil is different, since it uses ethanol as a fuel, so we are working on substantial modifications to our engines with AVL (another technical partner). We aim to launch our products here in 2016, around the BrazilOlympics andwill targetthe huge regional market. Its a tough and a very evolved market with well-established players," he said.

Since its split with Japan's Honda Motor Corporation in 2012, Delhi-basedHero has been focusing aggressively on overseas markets where operations had been restricted before. In the past year, the company has started exports toaround 18new countries like Peru, Ecuadorand Guatemalain South & CentralAmerica, besides countries like Kenya and Ivory Coastin Africa. It has tied up with four partners - EBR, Austria's AVL, Italy's Engines Engineering and Fiat group'sMagneti Marellito develop its own vehicletechnologies, while investing Rs 450 crorein a major R&D facility near Jaipur.

Hero, which currentlyhas fourplants (two in Haryana, Haridwar and Neemrana)at homeand a fifth in Gujarat starting operations next year, recently announced a manufacturing joint venture inBangladesh. It also has an assembly line in Kenya, which is currently run by a local partner.

(Thewriter is in So Paulo at the invitation of Hero MotoCorp)