Hero MotoCorp (HMCL), the world's largest two-wheeler manufacturer, today launched its operations in Bangladesh through a Joint Venture (JV) with the reputed Nitol Niloy Group, with its vision of expanding its global footprint to as many as 50 countries by 2020.
Pawan Munjal, managing director & CEO, Hero MotoCorp said, ''The commencement of our operations in Bangladesh is a significant milestone in our strategic global expansion plans. In addition to being our first overseas joint venture, this is also where our first manufacturing plant outside of India will come up. Once operational by the second quarter of Financial Year 2015-16, the plant will have an annual capacity of 150,000 units. We are aiming to have around 20% of market share here in the first year of our operation.''
''With the setting up of the state-of the-art world class plant here, we will bring the latest modern technology into the country. This will generate direct & indirect employment and opportunities in the country.''
''I am delighted to have the Nitol Niloy Group come on board as our partner in this market. I am sure with their rich experience in this market we will be able to provide convenient, fuel-efficient mobility to every customer,'' he added.
Abdul Matlub Ahmad, chairman, Nitol Niloy Group of Companies said, ''The scope of this agreement is quite significant for our Group as our partner in this JV is the world's largest manufacturer of two-wheelers. The aim is to join hands with Hero MotoCorp in order to provide technologically-advanced, innovative and fuel-efficient two-wheelers for customers in Bangladesh. With this JV, our business and enterprise now enters a new era of innovation and excellence. I agree with Munjal that through this JV, we will be playing a catalyst role in the development of ancillary industry in Bangladesh and beyond.
While Hero MotoCorp has rapidly expanded its global footprint, this is the company's first overseas joint venture to set up a two-wheeler manufacturing plant outside of India, since it commenced its solo journey almost three years ago. Hero will hold majority stake of 55% in the new JV while the Nitol Niloy Group will hold the rest 45% stake. There will be a total equity injection of USD 12.6 million in a ratio of 55:45 over a period of two years. The new venture will have a CAPEX of USD 23.2 million in the first year of its operation (Financial Year 2014-15) and a total investment of USD 40 million over the next five years.
While the manufacturing plant will be operational by the second quarter of FY 2015-16, the Hero range of two-wheelers are already being made available in Bangladesh through the initial 50 retail outlets. Munjal today inaugurated the first of the flagship Hero showrooms in Dhaka. More outlets are also being rapidly added in markets across the country.
The range of Hero two-wheelers being made available in the country include successful models like the entry-level segment lOOcc bikes- HF Dawn & HF Deluxe, Splendor+, Splendor Pro, Splendor iSmart, Passion Pro, the deluxe segmentl 25cc Super Splendor and Glamour and the premium segment 150cc Xtreme and Hunk, and the 100-cc scooter Pleasure.
Hero has launched an unprecedented 5-year warranty on all these models in Bangladesh-a statement of confidence in the technological superiority of its products.
The Splendor iSmart is the most recently launched offering of Hero MotoCorp that comes with the revolutionary i3S (Idle Stop and Start System) technology. i3S technology automatically shuts the engine when idling, and turns it on when needed, with a simple press of the clutch, giving more mileage in congested cities.
Hero MotoCorp will soon launch brand-building initiatives in this market with the Bengali version of the iconic Hero anthem ''Hum Main Hai Hero.''
Shares of the company gained Rs 21.25, or 0.96%, to trade at Rs 2,238.95. The total volume of shares traded was 9,612 at the BSE (1.41 p.m., Monday).