Hero Cycles at Eurobike for Forging More Strategic Alliances
LUDHIANA, India – After acquiring a majority 51% stake in UK based Avocet, India’s biggest in bikes Hero Cycles Ltd remains on a buying spree. The company says to be in the midst of forging strategic alliances with number of European companies and is at Eurobike for more brand buyouts and possible technical joint ventures. All this must ultimately lead to a full-fledged production base in Europe.
“The acquisition of Avocet gives us access to distribution and to major retail chains in Europe like Halfords, Tesco and others. The move gives us an insight into the European market. With the experience of Avocet’s Steven Walsh we will be able to understand the market and to identify products that could be manufactured in Europe or at our Indian plants to take advantage of low cost manufacturing,” said Pankaj Munjal, Chairman & Managing Director, Hero Cycles Ltd in an exclusive talk with Bike Europe.
Avocet supplies around 150,000 bicycles annually to various retail chains in Europe with sales of about GBP 17 million (€ 23.4mn). “We have outlined plans to hike sales and transform it into a GBP 100 mn company in the next years,” said Munjal.
India’s largest bicycle maker is also keen to create a space in EU’s e-bike market, “We have been working with global iconic auto brands for a long time. We believe that the experience in the automotive sector would be handy in making an A2B range specifically targeting the EU market with the right transmission & drivetrain,” he stressed. Companies that belong to the Hero Group supply components to BMW, Suzuki, GM, Honda, Nissan and Toyota.
More JVs in pipeline
On more acquisitions, brand buyouts and joint ventures Munjal said, “We are in touch with four companies based in Europe with two in the UK and other two in Germany in order to increase our footprint in the EU market.” Hero Cycles is visiting Eurobike this week for meetings with companies for further negotiations.
Overseas production base
Asked if Hero Cycles has any plans to set-up an overseas production base, Munjal said, “This would be a logical step in the future as on shipments of complete bikes from India an import duty of 14% is levied in the EU.”
Licensed part production started
Earlier this year Hero Cycles has launched a premium P&A range under the brand name ‘Spur’ in the India market. “Spur is a German brand and we started production last June under a licensing agreement,” said Munjal. The launch of Spur P&A range is to further consolidate Hero’s share of the hi-end premium segment of the Indian bike market. The current line-up includes front suspension forks, double wall alloy rims, BB cartridges and freewheels. Next to India Hero Cycles also aims to market the Spur range in Europe.