Hero MotoCorp planning to acquire a two-wheeler company

Hero MotoCorp planning to acquire a two-wheeler company
author image CarTrade Editorial Team
Thursday 03 October 2013, 11:52 AM

Two wheeler manufacturer Hero MotoCorp recently announced that it is planning to expand its reach across different parts of the globe through acquiring companies. The company that was previously involved in a joint venture with Honda is actively looking out for firms to share technological means to manufacture new bikes. Commenting on this, Managing Director and Chief Executive Officer at Hero MotoCorp, Pawan Munjal, said "We have not stopped efforts to find technology partners, it is an ongoing process. We are open to acquiring companies."

On being asked about the possibility of Hero MotoCorp acquiring a two-wheeler company in near future, Munjal told: "We are not aggressively scouting for one at the moment but if some target comes on the way, we will surely look at it." Since the company has actively entered joint ventures and alliances with major companies in the recent past, Munjal told this time Hero MotoCorp is looking to expand its reach in the technological sector. He further said, "Money is not an issue, it is about putting it to good use."

Hero MotoCorp planning to acquire a two-wheeler company

In the meanwhile, the company had gained a 49.2 per cent stake in US-based company named Erik Buell Racing, which manufacturers street racing bikes. The total cost of this technological outsourcing deal was around 25 million dollars. Apart from this, Hero MotoCorp ventured in a join alliance with Austria-based engine manufacturer, AVL, in order to develop its capabilities in the respective segment. Furthermore, the company also tied up with several two-wheeler design oriented companies hailing from Italy so as to strengthen its future line-up of products.

At present, the company has maintained cash reserves of about Rs. 3,500 crore and is now looking to strengthen its Research & Development set-up in India ever since it bought the entire 26 per cent stake of Honda in their joint venture, Hero Honda, for Rs. 3,841.83 crore in December 2010. After parting ways with Honda, Hero MotoCorp has set high aims and targets that include expanding its reach beyond the country. In August, the company shared its future plans to expand its market base by 50 by the year 2020 with an aim to set up 20 manufacturing facilities spanning across different parts of the world.

While for sales targets, the company has set sights on reaching the milestone of selling 100 million bikes in all markets by 2020. The company told that the breakup of sales by 2020 in Indian market and overseas market will be different as it expects the share of international market to be around 10 per cent. Besides to it, Hero MotoCorp is planning to sell 1 million vehicles till the end of 2017. During July 2013, the two-wheeler company of India expanded its reach to the African region wherein it launched several bikes in Kenya by assembling them at the newly set-up facility. After that, the company entered into the fold of Latin American countries with the launch of its products in Peru.

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