Aiming to become the technological leader in the two wheeler market, country's largest motorcycle maker Hero MotoCorp (HMC) on Tuesday announced a strategic joint venture (JV) with Italy based Magneti Marelli. Under the new JV, HCM- MM Auto limited, both partners initially for the first three years would invest nearly $ 8.5 million and plan to a total of $ 27 million over the next 10 years. The new firm would develop and manufacture new fueling systems and next generation powertrains.
In HMC-MM Auto ltd, Hero MotoCorp will hold 60 per cent stake while the rest 40 per cent would be held by Magneti Marelli. Out of the total investment, HMC would provide 60 per cent and the Italian firm would finance the other part. Magneti Marelli, designs and produces advanced systems and components for the automotive industry around the globe and reported a turnover of 5.8 billion Euros in 2012.
In an official statement, HMC's Managing Director and CEO, Pawan Munjal said, "This is our first JV since charting our solo journey and as an immediate opportunity and focus area, the new firm shall be taking up development and manufacturing of next generation fueling systems. " Mangeti Marelli's CEO, Eugenio Razelli while talking about the advantages of the partnership added, "The aim is to partner with HMC in order to equip all Hero motorcycles and scooters with advanced powertrains solutions."
The total investment is likely to be around $ 27 million over the next ten-year period, Munjal said adding that the JV would be targeting sales of around $ 100 million in the first five years. "We believe that this development will help the cause of Hero products, Hero engines immensely. It will surely improve the drivability of our products. It will also help in meeting environmental regulations as we go forward," Munjal said.
HMC MM Auto would also develop its own autonomous development centre and help in building Electronic Fuel Injection (EFI) systems for Hero Motorcycles. These new EFIs would improve motorcycle's performance and also its fuel efficiency while giving out even lower emissions.