The Telegraph
Saturday , June 14 , 2014
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Hero date for Brazil kick-off

New Delhi, June 13: Hero MotoCorp is planning to enter Brazil and the US markets within the next two years and is on the lookout for a partner in the South American country.

The country’s largest two-wheeler maker plans to enter Brazil by 2016 and believes it will help the company consolidate its position in the entire region. The company already sells products in Peru, Guatemala, Honduras and El Salvador in central America.

It also plans to begin work on its manufacturing facility in Colombia in the next two months by investing $70 million. “We are looking to enter the Brazilian market around the Olympic Games in 2016. We are developing some engines specifically for this market. It is an attractive market for us,” managing director and CEO Pawan Munjal said.

He added that initially the company might bring in products from India or utilise the Colombian plant. “But the market being big, it needs manufacturing base in the country,” he said. He, however, did not a share specific timeline for the plant.

“Besides we are also looking for a partner in Brazil,” Munjal said. Brazil has an estimated market of 2 million two-wheelers per annum. He said the company would enter the market with its existing products.

“By 2016, the facility in Colombia will be ready. So we could bring in products from there also,” he added. On plans for the Colombian facility, he said, “We plan to have bhoomi poojan (start of work) in the next 1-2 months. It will take around 12 months to complete the project.”

The facility will also be utilised to supply products to neighbouring countries such as Peru, Ecuador, Chile and Central America. The company plans to enter the US next year. Initially, it plans to sell entry-level motorcycles and scooters in the 100cc-125cc category.

“Our products are already going through homologation in the US, and that takes a long time,” he said.

“There is usually a small window for launch, so while we have showcased our products at a motor fair already we will formally launch only next year since we do not want to hit the market in the winter season,” he said.

Hero would distribute its products through Erik Buell Racing (EBR), its technology partner at a later stage. The company in 2013 had bought 49.2 percent stake in EBR. “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. We feel there is a market for such smaller bikes, especially in the cities, and we might co-brand the product with EBR. In the future, we could raise our stake in EBR as well if the need arises,” added Munjal.

Hero MotoCorp, after separating from Honda in 2011, has augmented its global presence and currently sells products across 18 countries including Turkey and Egypt and has established assembly units in Kenya, Tanzania and Uganda in East Africa through its distributors.

In August 2013, it announced plans to enter 50 new markets by 2020 with a target of 20 manufacturing facilities across the globe and an overall annual turnover of Rs 60,000 crore.