Saturday, March 10, 2012

Hero MotoCorp to Enter Africa & Latin America

Hero MotoCorp (HMC) manages to stay in the hearsay for the past few months for some reason or the other. The company manages to sell good numbers of its entire range of bikes and scooters in the last quarter thereby making good profit, following the break – up with Honda. Then the company managed to tie up with Eric Buell Racing (EBR) for the development of high displacement bikes for the company in the near future. In fact the HMC Leap which was showcased in the Delhi Auto 201 was a concept that was designed and developed by Eric Buell Racing. This is basically a hybrid scooter and we’d reported a lot about this right at the time of expo.
Now, the company is again in the news for it has announced its plans to foray into the African and Latin American market. The company had earlier announced its plan just after the break up between the two partners and then stayed voiceless about this for quite some time. Now, there are again talks about this in the media.
The world’s largest two wheeler maker will now get on on its global drive by the month of April-June this year, with plans to start exports to West and East Africa, and Latin America under the new brand name – Hero MotoCorp.
Business Line had reported that ‘A key pillar of its growth strategy after the separation with Japanese partner, Honda Motor, a year back, the export plans would fall under a new business arm created solely for the purpose – Hero International Business, sources said.’
The new business locations doesn’t just end up with African and Latin American markets but is also seriously eyeing South East Asia as well, where many two wheeler companies such as Bajaj Auto and TVS Motors have already marked their strong foothold. Bajaj’s Pulsar is one of the best sellers in these regions and so is the TVS Apache series which sells in volumes all along here.
Mr. Pawan Munjal, Managing Director and Chief Executive Officer, said the first set of new international distributors for the two-wheeler market leader have almost been finalized. In some markets, an assembly plant is also likely.
“We will be starting very soon … in a few months. We’re looking at many export models, it has to be a combination. Some of these countries would need to have assembly depending on what the duty structure is,” he said.
Initially, not all the ranges of bikes will be taken across the borders of the sub – continent. It’s only the CD range, Hunk and the CBZ Extreme that enters Latin America and the African market too.
The new overseas markets which are yet to see HMC products will see the ‘Hero Honda’ brand being completely removed totally and will be rebranded with Hero MotoCorp. The existing portfolio with the new corporate brand had been showcased at the Auto Expo this year in January.
Business Line also reported that ‘When under the 27-year old joint venture (then known as Hero Honda), the company’s exports had been restricted to the sub-continent and some Latin American markets such as Colombia – which would now continue.’
“In the joint venture structure, there was an arrangement that we could enter only certain markets and could sell only through the Honda network, which is why it’s now taking us time to set up our own distribution,” Mr Munjal said.
The decision of HMC is late compared with the company’s rivals. Bajaj Auto is selling over 30 per cent of its production in the higher margin export markets, Hero hopes to quickly tap this opportunity by selling a million bikes by 2016-17, accounting for 10 per cent of its $10 billion revenue target by the year 2020.

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