Hero MotoCorp and Magneti Marelli would invest $8.5 million in three years in their JV HMC-MM Auto to produce new gen powertrains in India
Hero MotoCorp, the country's largest bike maker on Tuesday said it has partnered with Milan (Italy) based Magneti Marelli for the manufacturing new generation powertrains through a joint venture in India.
Both companies will be investing $8.5 million in the joint venture — HMC-MM Auto Ltd — over the next three years and around $27 million over the next 10 years, Hero MotoCorp said in a regulator filing.
Pawan Munjal, managing director and chief executive of Hero MotoCorp told reporters, “We have decided to form a joint venture with Magneti Marelli for next generation fuel injection systems...a total equity injection of $8.5 million in the ratio of 60:40 will be injected in the joint venture over a period of three years”.
He added that the joint venture company would start manufacturing by the end of 2014 and is targeting $200-million turnover in the next ten years.
Hero MotoCorp will hold 60% in the joint venture, while the Italian firm will hold the rest. The joint venture would also be open to supplying components to other manufacturers as well, Munjal said.
Hero MotoCorp has already forged alliances with the US-based Erik Buell Racing and Austria’s AVL to enhance its R&D capabilities.
HeroMoto closed Tuesday marginally down at Rs2048 on the BSE, while the 30-share Sensex also ended the day marginally lower at 20,854.9.
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