Hero MotoCorp Ltd, the country’s largest two-wheeler maker, on Tuesday entered into a joint venture with Milan-based Magneti Marelli SpA for manufacturing new generation powertrains for two-wheelers. The companies will invest $8.5 million (around Rs 53 crore) in the new venture in three years.
The JV company, to be named HMC-MM Auto Ltd, will invest around $27 million over the next 10 years, and is targeting a revenue of $200 million by then, Hero said. While Hero will hold a majority stake of 60 per cent, Magneti Marelli will hold the rest in the venture, it added.
This is Hero’s first major joint venture after ending its 26-year partnership with Japan’s Honda Motor Co Ltd and commencing its solo journey a little over two years ago.
“The JV will bring in a key engine-related technology within the Hero group, thereby reducing (its) dependence on external vendors,” said Pawan Munjal, Managing Director and Chief Executive.
The JV is also open to supply to other manufacturers.
The new company will take care of one of the most important areas in which various technologies will be involved in making better fuel-efficient two-wheelers and environment-friendly modern engines, Hero said.
The new company will also develop its own autonomous Development Centre, and as Hero expands its global footprint, this centre will enable the two-wheeler maker to develop products featuring appropriate technology for different customers across the world, Munjal said.
Magneti Marelli, which has 83 production units, 12 research and development centres and 26 application centres in 19 countries, is a major supplier of electronic systems, lighting, powertrain, suspension systems and shock absorbers for automobiles.
ronendrasingh.s@thehindu.co.in