Hero MotoCorp, India’s largest manufacturer of two-wheelers is closing down a venture it had floated in the United States. The company, going by the name HMCL (NA) Inc, is owned 100% by Hero MotoCorp and was formed with the intention of taking its business to the US. However, its plans have gone awry with the local unit, Erik Buell Racing, Inc (EBR) in which it had picked up 50% stake, filing for bankruptcy. It has therefore decided to close down this subsidiary.
The Indian company had plans to join hands with the American entity, Erik Buell Racing, Inc (EBR) and make motorcycles and sell in the US market. Those plans have now been shelved following EBR’s decision to apply for insolvency. It was Hero MotoCorp’s 100% subsidiary HMCL (NA) Inc which had made the investment in EBR and with that company winding up, the Indian company felt the existence of the subsidiary is redundant. In line with the procedure in the US, HMCL has filed for dissolution with the Secretary of State in the state of Delaware.
It was in 2014 that Hero MotoCorp had expressed its desire to enter the US market and launch its range of motorcycles but not a single vehicle could be made or sold.
Very few Indian firms have been able to make a dent in the US market in this segment. The only two exceptions are Royal Enfield with its Bullet motorcycles and Mahindra & Mahindra with its electric scooters.
Hero MotoCorp, however, has been successful is setting up a plant in the South American country of Columbia where it manufactures bikes and markets in that region. The company has registered another company in the US to handle this plant, as well as the marketing in several South American nations. Argentina, Bolivia, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala and Honduras are the countries where it has some interests in selling its bikes.
The other overseas manufacturing facility owned by Hero MotoCorp is in Bangladesh.
Speaking of the export potential among the Indian two-wheeler makers, Hero MotoCorp has not been able to export its products in large numbers, whereas rival Bajaj Auto manages to export as much as 40% of its production to several markets, mostly developing economies in Asia, Africa and Latin America. Hero MotorCorp is able to export less than 3% of its production, in comparison. It lost much of its export market after it parted ways with Honda about a decade ago.