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Hero MotoCorp

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Coming from left field but hitting it squarely in the “awesome” section, Hero recently unveiled a 150cc diesel engine powered motorcycle called the “RNT”. The oil burner, with its square lines, flat surfaces and 1980’s Sci-fi aesthetics looks fantastically practical and more like a scooter than a motorcycle.

The RNT concept weighs about 300 lbs, has a top speed of 44mph, and a tank capacity of 1.5 gallons. At that weight, the Hero RNT 150 is quite pudgy compared to your typical 150cc scooter but the potential benefits of the increased efficiency and range of the Diesel might make up for that.

To top it all off, the concept features two wheel drive. It’ll be interesting to see if and how Hero goes forward with this concept.

Erik Buell Racing has its sights set on the other side of the Atlantic. To expand brand awareness and distribution on the continent, they have opened up an office in Alkmaar, Netherlands. The move is also aimed at promoting their participation in the 2014 FIM World Superbike Championship with riders, Geoff May and Aaron Yates.

With Hero MotoCorp holding a near 50% stake in EBR, it also seems like a move for Hero to expand its marketing and distribution of it’s own products to the European market.

With Hero intending to bring its bikes to the North American market in 2014, an expansion in the European market, if successful, could solidify its brand recognition in the Western world, especially amongst younger riders or commuters looking for a cheaper pair of wheels to get around.

Once upon a time, Hero MotoCorp was Hero Honda, with the Indian brand relying on its Japanese counterpart to provide the technology that then went into the partnership’s emerging market motorcycles. The joint-venture was a stepping stone for Honda to launch into India, and for Hero it was a quick way to gain marketshare in its lucrative domestic market.

Fast-forward to present day, and Hero has not only become Hero MotoCorp, but it has also become the largest motorcycle manufacturer in India. Honda is a stand alone brand in India now, and trails only Hero MotoCorp with its motorcycle sales volume in India.

To maintain its position at the domestic leader, Hero MotoCorp has had to rely on replacing its technical partnership with Honda by forging alliances with various other brands around the world. Perhaps the most famous of these partnerships is the one with Erik Buell Racing, which includes the Indian brand sponsoring the American company’s racing efforts, and owning a sizable 49.2 % chunk of Erik Buell Racing’s private corporate stock.

Add a new brand to the list now though, as Hero MotoCorp has formed a joint-venture with the Italian electronics wizards at Magneti Marelli. There are bonus points for good timing as well, as the news comes just a few weeks before Hero MotoCorp is to be completely free of Honda’s technology.

A plethora of Indian Financial publications are reporting that Hero MotoCorp has bought a 49.2% stake in Erik Buell Racing for $25 million. Hero MotoCorp is India’s largest two-wheel manufacturer, and for a year now has partnered with Erik Buell Racing for technical development, as well as sponsoring the American company’s AMA Pro Road Racing team for the past two seasons.

Today’s news confirms numerous rumors we have heard about the Hero investing in EBR. Acquiring only 49.2% of Erik Buell Racing, Hero has only a minority stake in EBR, and while we cannot confirm the information, we would imagine that the odd 49.2% ownership was done to keep Erik Buell as the majority shareholder in his company.

Hero may be losing ground to Honda in its smallest displacement categories in its home market of India, but the Indian brand is poised for good growth abroad. Already linked to a number of projects with Erik Buell Racing, Hero MotoCorp is said to be also eyeing the African and Latin American markets for its next international business moves.

Hoping to enter a few markets in Africa and Latin America by the end of the company’s fiscal year, Hero MotoCorp is cagey on specifics regarding its overall international plan. However, in September of this year, Hero’s CEO Pawan Munjal stated that the company would start assembly plants in Kenya and Nigeria, tipping those two countries as the starting points for the Indian company’s African market invasion.

As for Latin America, Colombian market is favored to be the first vector, with Munjal also tipping that Hero MotoCorp would establish an assembly operation in the South America country, and then presumably work its way farther north. The position also easily positions the Indian company for expansion south into lucrative markets like Brazil, Argentina, and Peru.

According to The Economic Times, India’s premier financial newspaper, Hero MotoCorp is working on a 250cc sport bike, in conjunction with Erik Buell Racing. You may recall that Hero and EBR have already agreed to a technical partnership, which also saw the Indian motorcycle manufacturer become Erik Buell Racing’s title sponsor in the AMA Pro Racing Superbike series.

After its break up with Honda in the Hero Honda relationship, Hero MotoCorp has been relying on other firms for its technical developments. The Economic Times suggests the same can be said for this 250cc sport bike, with EBR handling the development of the machine, while Hero handles the business end of things, namely the quarter-liter’s production and distribution.

It has just been announced that Erik Buell Racing has received $20 million in funding from foreign investors. A part of the federal government’s EB-5 program, the deal was brokered by FirstPathway Partners, a company that specializes in facilitating the funding of companies through wealthy individuals that are abroad. The announcement is a boon for EBR, as the company has struggled for financing since it began operations after the closing of Buell Motorcycles by Harley-Davidson.

The $20 million in funding will go towards building more affordable models, says the Milwaukee-based company. In turn, this news means that Erik Buell Racing will need to bring on more staff, and expand its facility for production at a greater volume (54,000 square feet says Buell). Erik Buell Racing hopes to start selling $20,000 street bikes once it gets its business in order for larger volume, with the expectation being that those models will be similar to the EBR 1190RS, though without such high-spec components.

The second largest motorcycle manufacturer in the world, Hero MotoCorp, says that by 2014 it will be free of its entanglement with the largest motorcycle manufacturer in the world, Honda. Creating a joint-venture in the Indian market, Hero and Honda went their separate ways in December of 2010, after a 26-year relationship.

Despite Honda wanting to go it alone in India, the renamed Hero MotoCorp retained some licensing rights to use Honda technology until 2014, so it makes sense that the company would announce its impending autonomy at this juncture.

Seeing its 27-year-long joint-venture with Honda come to an end last year, Hero MotoCorp has been picking up technology partners with an intense pace. With its 2014 rapidly approaching, Hero already counts Erik Buell Racing as one of its technical partners (as well as a potential acquisition target), and now Hero has now announced that the Austrian engineering design firm AVL will help the Indian company with a new range of larger-dipslacement motorcycle motors.

The move towards larger displacement engines is surely a sign that Hero MotoCorp has its eye on the export market, as it already accounts one of every two motorcycles sold in India. Surely seeing the work that rival Bajaj has done with KTM and the Duke series of motorcycle, we can expect Hero to go after a similar position in Europe, with even larger models for the American market.

Two weeks and two separate rumors about Hero MotoCorp’s acquisition warpath. Last week the Indian motorcycle manufacturer was said to be eyeing a minority equity stake in Erik Buell Racing. Having already hired the American sport bike maker to help innovate on some of Hero’s upcoming small displacement machines, the two companies sweetened the deal with Hero becoming the title sponsor to EBR’s AMA Pro Superbike racing effort.

This week the spotlight shines on Ducati Motor Holding, which has quietly been for sale for almost a year now. Originally wooing an acquisition from Mercedes-Benz, the Italian motorcycle manufacturer has been linked to a variety of other companies, as well as a public offering on an Asian stock index. With our sources telling us that Ducati has been trimming the fat from its books in order to make its earnings more attractive, Hero MotoCorp is the latest potential buyer to enter the fray and to talk to bankers about a Ducati acquisition.