Hero Cycles to Enter US Market
Hero Cycles has announced plans to enter the US market by the end of this year, for which it is close to signing up with a local partner. According to a report in the Economic Times of India, Hero Cycles not only wants to
NEW DELHI, India – Hero Cycles has announced plans to enter the US market by the end of this year, for which it is close to signing up with a local partner.
According to a report in the Economic Times of India, Hero Cycles not only wants to sell to consumers directly but also supply the retail giant Walmart as well as the department store chain Sears. To fulfil its new distribution strategy Hero Cycles will invest 5 million euro in a new factory in India solely for the production of bicycles for the US market.
Hero Cycles products are currently sold in the US through third party distributors only. The company is now looking at a more direct presence there. “In the next two months, we expect to sign a contract with the US partner and start selling products by the end of the year,” said Hero Cycles Managing Director Pankaj Munjal, without disclosing the name of the potential partner.
The bicycles on the US market will not have the brand name Hero, but will be marketed under the brand name of the US firm, which will also distribute the products.
The bicycles are likely to be priced between 200 and 800 US dollar. In order to supply the US market, the company will set up a new plant in Punjab, a joint investment of Hero Cycles together with a component supplier. “The plant will have an annual capacity of 1.5 million units in the first year of operations.”
“When the new plant will run at full capacity by April 2011, Hero Cycles will have a total capacity of around six million units annually”, Munjal said. Currently the company runs two manufacturing plants at Ludhiana, in Punjab, India.