BackHero MotoCorp to enter Brazil two-wheeler market by 2016
Brazil, slated to host the Olympic games in 2016, has an estimated market of 2 million two-wheelers per annum
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Sao Paulo: India’s largest two-wheeler maker Hero MotoCorp. is planning to enter Brazil by 2016 as it looks to consolidate position in the fast-growing South American market. It also plans to begin work on its manufacturing facility in Columbia in the next two months, investing $70 million.
“We are looking to enter the Brazilian market around the Olympics in 2016. We are developing some engines specifically for this market. It’s an attractive market for us," Pawan Munjal, managing director and chief executive officer, Hero MotoCorp, said. The company needs to develop engines specifically for Brazil as the country uses ethanol-blended petrol. “Brazil is not only the largest market in Latin America but also technically different from other markets as it uses ethanol. Our current engines are not tuned for such fuel and so engines are under modification with the help of (engine developer) AVL," Munjal said.
Initially, the company may bring in products from India or utilize the Columbian plant for Brazil, but the market being big, it needs a manufacturing base in the country, Munjal added. He, however, did not share a specific timeline for coming up with a manufacturing plant in the country. “Besides we are also looking for a partner in Brazil," Munjal said.
Brazil, slated to host the Olympic games in 2016, has an estimated market of 2 million two-wheelers per annum. When asked about the range of products to be launched in Brazil, Munjal said the company would enter the market with its existing products. “By 2016, the facility in Columbia would be ready. So we could bring in products from there also," he added.
On the plans for the Columbian facility, he said: “We plan to have bhoomi poojan (start of work) in the next 1-2 months. It will take around 12 months to complete the project".
Besides serving the Brazilian market, the Columbia plant will be utilized to supply products to neighbouring countries such as Peru, Ecuador and Chile, and Central America, he added. Hero MotoCorp also has presence in markets including Peru, Columbia and Guatemala.
The company, after separating from Honda in 2011, has augmented its global presence and currently sells products across 18 countries, including Peru, Guatemala, Turkey and Egypt. It has established assembly units in Kenya, Tanzania and Uganda in East Africa through its distributors. The company is preparing to set up a manufacturing unit in Colombia to cater to the Latin American markets. In August 2013, it announced plans to enter 50 new markets by 2020 with a target of 20 manufacturing facilities across the globe and an overall annual turnover of ₹ 60,000 crore.
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