Hero MotoCorp seems to be going all out to dominate the global two-wheeler industry. After its recent strategic alliance with the American motorcycle manufacturer Erik Buell Racing (EBR) to develop new products, the company has now announced yet another joint venture with the Milan based company Magneti Marelli for the production of new generation powertrains for two-wheelers and three-wheelers including a new electronic fuel injection system (EFI) that would help the company to improve fuel efficiency of its vehicles. Magneti Marelli basically designs and produces advanced systems and components for the automotive industry.
The joint venture firm HMC-MM Auto Ltd will receive investment funds amounting to $8.5 million from both companies in the span of next three years and $27 million over the next 10 years. Hero will hold 60 percent stake in this JV firm while Magneti Marelli will hold the remaining 40 percent stake. The Indo-Italian joint venture expects to generate a revenue of $100 million over the next five years and further plans to double the same over the next ten years. This JV firm may also sell their powertrains to other companies in the future.
Hero MotoCorp and Magneti Marelli would commence manufacturing by the end of 2014. This would help Hero offer products that would have better drivability and improved fuel efficiency while complying to environmental regulations. Hero after its split with Honda is facing stiff pressure in the domestic market. The company is also developing its own autonomous research and development centre. This alliance would help Hero MotoCorp in its domestic and global growth while offering significantly improved products with enhanced performance.