Indian firm Hero MotoCorp, the world’s largest maker of two-wheelers, will buy a minority stake in Erik Buell Racing for an undisclosed amount.
“We have a flexible free-flowing pact with EBR, which would be developed into a equity partnership,” Pawan Munjal, CEO of Hero MotoCorp, tells The Economic Times.
Hero last year parted ways with Honda after a 27-year joint-venture partnership. The Economic Times claims industry watchers have identified lack of cutting-edge technology as the firm’s biggest challenge for keeping its lead in the domestic market. The EBR partnership will secure uninterrupted technological support for the firm.
Erick Buell tells the paper: “We would look forward to have both technological alliance and partnership with Hero MotoCorp in the future. A marriage would lead to huge synergies in the long term.” EBR has an annual capacity of 15,000 units, the paper reports.
Hero also can use the partnership to get a foothold in overseas markets. “As we turn global, which is our long-cherished aim, EBR is a strategic fit that will help us gain traction in overseas markets,” Munjal says.
Under the agreement with Honda, Hero had been restrained from exporting vehicles.
The Munjal family owns a majority stake in Hero. The firm sells more than 6 million two-wheelers per year in India, where it holds 56 percent market share.
Posted by Arlo Redwine
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