Hero MotoCorp to set up factories in North and Latin America

Hero MotoCorp is set to open factories in North and Latin America, the first instance of the Indian two-wheeler major looking at starting full-fledged manufacturing abroad. The company, controlled by the Munjal family, was earlier prohibited from making overseas investments as part of the joint venture agreement with erstwhile partner Honda.

But the divorce with Honda in 2011 has seen the company take gradual steps towards generating a substantial portion of sales from exports, which is now prompting it to look at setting up factories abroad.  "While so far we have set up CKD (completely-knocked down) assembly units in some markets, now we are looking for a very big role in at least three countries. These are Brazil and Colombia in LatAm and Mexico in North America," Pawan Munjal, MD & CEO of Hero MotoCorp told TOI here. 

Munjal said the three countries will have full-fledged manufacturing operations where the company will make twowheelers not only for the respective markets, but also for neighbouring countries. "These will be like manufacturing hubs catering to various regions. The unit in Colombia is expected to come up by the middle of 2014, while the other two will happen a little later. We are doing the home-work for these markets." 

The size of the two-wheeler market in Brazil is around 15 lakh units, while Colombia is 6 lakh units. Mexico is relatively smaller at 2.2 lakh units. Exports currently form a very small portion of Hero Moto's sales, though Munjal has ambitious plans as he looks at a bigger play in various regions. "Our long-term target is to get at least 10 per cent of our sales from overseas markets." 

Foreign Ride

It is set to be Pawan Munjal-led Hero MotoCorp's first instance of starting full-fledged manufacturing abroad Company taking gradual steps to increase sales from exports It was earlier prohibited from making overseas investments as part of the joint venture agreement with Honda 

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Over 12 products to be launched in FY14 

Hero MotoCorp will launch over a dozen new products, including variants and refreshes, in the fiscal year ending March 2014, Pawan Munjal said. "All these will be on existing platforms, while products on new platforms will start coming in from calendar year 2014," he said. The company will also showcase a range of new products, including concepts and hybrids, at the Delhi Motor Show in February next year.