The Yamaha-Hero deal will result in the joint venture supplying the growing global demand with India-made drive units
Yamaha Motor and Hero Motors Limited have today signed a deal which will result in them jointly establishing a company to manufacture hub-mounted drive units for electric bicycles.
Scheduled to be established by the end of this November, the joint venture will see Hero Motors Limited (which owns Hero Cycles, India’s largest bicycle maker) holding 90 percent stake and Yamaha Motor holding the remaining 10 percent.
To be located at Ludhiana in Punjab, the new company, which is yet unnamed, will be established with an initial capital of Rs. 22 crores.
A statement from the firms noted that the Yamaha-Hero deal was made as the Japanese firm expects the prominence of hub-mounted drive units in e-cycles to continue to rise.
At present, Europe is the largest market for e-cycles and about half of the market’s offering use hub-mounted drive units that house the electric motor in the centre of the driving wheel.
Thus, through the Yamaha-Hero deal, the companies will be able to supply the growing global demand for electric bicycle drive units with a product made in India.
Yamaha already offers centre-mount drive units (set near the pedals) in its electric bicycles. By adding the hub-mounted drive units to its portfolio, Yamaha looks to raise its capabilities in the electric bicycle business.