Page 32 - IACC Newsletter June 2013 Issue 11

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platforms — currently they produce only 1190cc bikes, they will be an extension of our R&D,” Pawan Munjal, MD & CEO,
Hero MotoCorp said. He added that the company is on the lookout for more such stake purchases as well.
Of the total, a first tranche of $15 million has already been invested by Hero, while the remaining $10 million will be
invested over the next nine months. Following the deal, EBR founder Erik Buell will continue to be the chairman, while
Hero will place two directors on the board of the company.
Munjal said that the EBR stake purchase will help the Hero brand enter North American and European markets where
the trend is shifting towards smaller displacement bikes. Hero currently produces bikes between 100cc (HF Dawn) and
230cc (Karizma), while EBR focuses on 1,000 cc-plus bikes.
In order to start complete development of its own products after buying out erstwhile partner Honda’s 26% stake in
2011 for Rs. 3,842 crore, Hero in 2012 entered into a partnership with EBR and two other technology firms, Austria’s AVL
and Italy’s Engines Engineering. Later this year, Hero will introduce few models with minor upgrades done by EBR.
While Hero is also setting up its own R&D center near Jaipur, it plans to show these self-developed models in the Auto
Expo in February next year. Hero also has a technology license pact with Honda that runs till June, 2014, after which it
will not get assistance on new models, though on few existing models it can continue to sell on payment of royalties.
Hero also expects exports to grow 75% in FY14 at 3.5 lakh units on the back of rapid addition of new export markets like
Kenya, Burkina Faso, Ivory Coast in Africa, and Ecuador and Peru in South America. Apart from other countries in the
sub-continent, Hero recently started exports to El Salvador, Guatemala and Honduras.