Hero MotoCorp Ltd (HMCL), the country's largest bike maker, has entered into a 60:40 joint venture with Milan (Italy)-headquartered Magneti Marelli for developing and manufacturing new generation fuelling systems in India, the company said in its communiqué to the exchanges.
Hero will hold 60% stake in the joint venture company HMCMM Auto Ltd and the Italian firm will hold the balance 40% stake. The JV firm is targeting revenue of $100 million in five years and plans to double it in 10 years. The companies together will invest $8.5 million in the JV over three years and $27 million in 10 years.
This is HMCL’s first partnership since commencing its journey a little more than two years ago as a standalone entity after its separation from Honda Motor Co. Ltd.
Pawan Munjal, managing director and chief executive of Hero MotoCorp, said, “We have decided to form a joint venture with Magneti Marelli for next generation fuel injection systems." The joint venture would also be open to supplying components to other manufacturers as well, Munjal said.
Hero MotoCorp has already forged alliances with the US-based Erik Buell Racing LLC, Austrian engine developer AVL List GmbH and Italy’s Engines Engineering Srl to enhance its R&D capabilities.
Magneti Marelli designs and produces advanced systems and components for the automotive industry. With its 83 production units, 12 R&D centres and 26 application centres in 19 countries, about 36,900 employees and a turnover of 5.8 billion euros in 2012, the group supplies to all automobile and two wheeler makers in Europe, North and South America and the Far East.
(Edited by Joby Puthuparampil Johnson)