Hero Motors has just inked a deal with BMW that sees the Indian motorcycle manufacturer building gearboxes for the Bavarian brand not only in the Indian market, but also worldwide. The five to eight year deal will see Hero building gearboxes for BMW on a variety of motorcycles, and we presume scooters, though which models exactly remains to be seen.
The news is a boon for the Indian motorcycle manufacturing industry, as it adds further credence to the country’s technical prowess. The deal is also beneficial for BMW as well, as the German company will not only be able to build its bikes for cheaper, but we’re sure BMW is gaining a foothold on the lucrative Indian market from the transaction as well. BMW currently imports fully-built motorcycles into India, but with this news, we see that business practice changing in the near future.
“We have developed the gearbox ourselves,” said Hero Motors Managing Director Pankaj Munjal. “Usually, components such as engines and transmissions are made by the company itself, as they involve advanced technology. We have achieved the expertise. BMW Motorrad will source gearboxes from us for products it sells globally.”
That Europe is the best place for sourcing automobile components is not necessarily correct. The landscape is changing. Our transmission business, for one, has been growing over 70 per cent a year for the last few years,” he continued.
This isn’t the first deal like this for Hero, as the Indian company already does about $200 million in business making parts for Canadian outfit Bombardier Recreational Products and other components for BMW. However the contract to build gearboxes for motorcycles is a signal that more skilled and technical products are being sourced from India and abroad.