Over modest growth rather than the expected in the last financial year, Hero MotoCorp, the world's largest two-wheeler firm announced that the company had bought 49.2% of stake from the American superbike manufacturer, Erik Buell Racing. The deal was signed for USD 25 million (~ Rs. 148.26 crore). The matter was disclosed by Mr. Pawan Munjal, Managing Director & CEO of Hero Motocorp. This is the first overseas acquisition of the firm after parting with its erst while partner Honda (currently HMSI).
"This is the first time that Hero has gone out of India to buy equity into a company. This is the first step of Hero in terms of financial investment (into a company) on the road towards globalisation of the Hero brand. This extends our relationship. We will be working with EBR even more closely now and get into selling and marketing of both EBR and Hero brands of products in both international and domestic markets," Hero MotoCorp MD and CEO Pawan Munjal.
The new tie-up with EBR will give a new boost to the firm. EBR is already a set firm in the North American market. It owns a great branding there. So the company is also planning to launch Hero motorcycles in the North American Market and also to launch Erik machine in India soon. However, it would definitely take time to reach India, said Mr, Munjal. The times are also not farer when motorcycles launch under this joint venture.
At present, the firm has paid an amount of USD 15 million. The rest remuneration will be made within 9 months, that's the contract reads. With the joint collaboration Hero MotoCorp expects to produce 20,000 units of EBR machines every year.
Earlier in 2011, Hero has revealed that the company was targeting a turnover of USD 10 billion in the next 5 years with by selling 10 million units and out of which 10% were from exports. It seems everything is going as the firm plans on its overseas business. Recently, Hero had launched bikes in some South American countries. Now, it's heard that Hero is into the African markets- Kenya, Burkinafso and Ivory Coast followed by Angola. The consortium will also establish couple of plants in Kenya and Nigeria.
Hero snapped the deal for USD 25 million. This will be a turning point for both firms and the whole two-wheeler industry to enjoy new stunning machines under this collaboration.
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