Hero MotoCorp to roll out two-wheelers in United States

Come next summer and Hero MotoCorp will roll out its two-wheelers in the United States and Canada in perhaps the most ambitious move in the top Indian bike-maker's race to become a global player.

Hero has appointed its American technology partner Erik Buell Racing as the exclusive distributor and plans to eventually set up manufacturing and assembly plants in the North America in due course, a top trade insider privy to the development told ET.

A "soft launch" of Hero two-wheelers was held last month at the inaugural American International Motorcycle Expo (AIMExpo) in Orlando, Florida, where Hero displayed some of its popular brands such as Hunk, ZMR, the updated HF Deluxe Eco, Splendor Pro and the Pleasure scooter, the person said on condition of anonymity. "Specific details on the range to be offered and pricing details have yet to be determined," the person said.

Pawan Munjal, managing director and CEO at Hero MotoCorp, confirmed to ET last week that a soft launch of its debut products has been made in the US.

At AIMExpo, EBR had issued a press release that quoted Munjal as saying: "EBR will be distributing Hero motorcycles in the United States and Canada on an exclusive basis starting summer of 2014.

"When contacted, the Hero MotoCorp spokesperson said it's too early to share any specific information in this regard. "We will make an official announcement at an appropriate time and will share our plans for the North American market at that time," the person said.

The person quoted earlier said the company is exploring the possibility of setting up assembly units in North America. "If the volumes are good, then it does make business sense to assemble the products locally," the person said. In an interaction after announcing the purchase of a 49.2% equity stake in EBR, Munjal had told ET that the US market holds promise for Indian two-wheelers.

"While the US is primarily seen as a market for heavier bikes, I am convinced that smaller two-wheelers in the range of 100cc to 250cc can also be successful in the US and other North American markets," he had said. "Our fully-owned new overseas subsidiaries such as the one in the US and in the Netherlands will play important roles in our future overseas acquisitions and investments.

"The American two-wheeler market is dominated by big bikes with over 600cc engine displacement. Harley Davidson, Ducati, BMW, Triumph, Yamaha and Honda are the main competitors in the market. Hero is investing $25 million for acquiring EBR stake through its newly incorporated and wholly-owned American subsidiary HMCL (NA). It has already invested the first tranche of $15 million.

This equity partnership was the first definitive indication of Hero's intentions to explore the North American markets," the person quoted earlier said. Munjal is personally driving the new products agenda at Hero and has given a clear brief to the R&D team to develop new models for global customers, the person added.

Since charting its solo journey in 2011, Hero has been expanding its global footprint. It has already commenced its operations in new markets such as Guatemala, El Salvador and Honduras in Central America, Peru in Latin America and Kenya, Burkina Faso and the in the African continent. It has set up its first Africa assembly plant in Nairobi, Kenya.

In his 'Vision 2020' for the company, Munjal wants Hero two-wheelers to be available in as many as 50 countries across the world by 2020.