Leading automotive component manufacturers Hero Motors and Yamaha Motor Co. (Japan) today announced they have entered into an agreement to create a global E-Cycle Drive Unit company with a robust product portfolio. The Boards of Directors of both companies have approved the transaction under which a manufacturing unit will be set up in India to manufacture E-Cycle drive motors for the global markets. The joint venture is the next step in the strategic alliance forged between Hero and Yamaha Motor Co. in September 2019 to work together in the E-Cycle product segment.
“We are pleased to announce this new joint venture for E-Cycle drive unit in partnership with the leading global drive unit manufacturer, Yamaha”, stated Pankaj Munjal, Chairman & Managing Director at Hero Motors Company (HMC) Group.
“Our combined strengths – Hero’s expertise in value-focused manufacturing and Yamaha’s technical expertise, global reach and access to future technology – are a potent recipe for success,” he continued. “HMC envisions India to be a global manufacturing hub for E-Cycles and the drive systems. The astounding growth of HMC’s international arm Hero International in this year has pushed up the Group’s revenue forecast from e-bicycles at just above ₹1500 Crore for FY23. This is primarily driven by HMC’s investments in EU brands, distribution, R&D and acquisitions. The EU E-bicycle market is growing by 25% CAGR, probably the fastest across consumer product categories and Hero is now well-poised to acquire a major chunk of this with key elements of the value chain in place – R&D, Manufacturing, Brands, Distribution and After-Sales Service. This joint venture is a major component of our ambition to be the first fully integrated player globally in the E-Cycles segment and adds strongly to our initiatives like expansion to Europe through Hero International and setting up of world-class industrial park in, Hi-Tech Cycle Valley, Punjab.” adds Mr. Munjal.
The joint venture will set up the manufacturing facility in Hero E-Cycle Valley, Punjab and expects to start production of the first model by November 2022. It will have a capacity of 1 million drive units in the future. In addition to the Hero and Yamaha branded E-Cycles, the joint venture will use the OEM networks of Hero and Yamaha for the sale of drive units in global markets.