Hero MotoCorp, already involved in a technical alliance and sponsorship of EBR racing teams, just bought a 49.2 percent stake in Erik Buell Racing for $25 million. The remaining majority portion of the company is still held by Erik Buell.
Ravi Sud, chief financial officer of Hero MotoCorp, said Erik Buell would be utilized as an extended research and development center and that the investment would be used by the U.S. partner to expand its manufacturing and sales operations.
He said Hero MotoCorp is aiming to export about 350,000 vehicles this financial year through March 2014, compared with 161,043 vehicles exported in the previous year.
Mr. Sud said Erik Buell sold just 65 motorcycles in 2012, but the aim is to sell about 20,000 motorcycles in 2017.
Erik Buell now has the backing to expand, though the goal of selling 20,000 motorcycles in 2017 cited above sounds like a very big step. Perhaps there are more models coming in the future that would make the goal more attainable. On the other hand, with extended reach in global markets due to the alliance with Hero, they are almost sure to increase sales from that alone.
Now, as long as Erik doesn’t let Hero buy that extra 2 percent of ownership, things should be OK and they will be able to remain “fiercely independent,” as their company likes to say, because we already know how that other story goes.