Hero Motors, Yamaha form JV to produce e-cycle drive motors
Hero Motor (HMC), the parent company of Hero Cycles is getting into a joint venture partnership with Japanese two wheeler major, Yamaha to make electric motors for e-bicycles for the global market.
Yamaha is expected to take a minority stake in the beginning and will eventually scale it up, said sources.
Hero and Yamaha will be captive consumers as they have been producing and selling e-bikes since years, said experts. Hero Motor has been operational towards forging joint ventures for the critical electric drive unit components to localize the components and decrease import reliance as well as boosting “Make in India” initiative to attract export orders, especially given the strained supply chains from China, in the post Covid scenario.
Hero, the largest integrated bicycle manufacturer in the world, has laid out aggressive plans to enlarge their electric bicycles business, globally.
The bicycle market in India is valued at US$ 0.9 billion with 15 million bikes a year. In 2020, European bicycle market was valued at US$ 8 billion and it is projected to reach US$ 17 billion by 2026, forecasting a CAGR of 13%. However, the Indian electric bicycles market, where the growth lies, is valued at US$ 0.1 billion, a small part of the European market.
Being the market leader in conventional push bicycles, Hero forged the electric bicycle market leading the revolution in the personal smart e-mobility segment which is even more significant in these times as it caters to sustainability, physical fitness, personal security and affordability.
The demand for electric bicycles soared after the outbreak of pandemic COVID-19, as the consumer preference changed from public transport towards personal vehicles and electric bicycles came out as an economical option for people, which increased the demand.
Having introduced the electric bicycle product to the Indian market through the Hero Lectro brand, HMC went on to buy globally recognised premium electric bicycle brands like HNF, Insync in European market. In addition to the expansion of the brand network, HMC is reinforcing its back-end with equally rapid pace. Mr. Pankaj Munjal, CMD, Hero Cycles stated “Lesser import duties are the need of the hour and will assist exports to grow. To compete against the least developed countries (LDCs) and GSP countries enjoying zero import duties and to remain globally competitive, it is very essential that India negotiates trade deals to bring down the import duties on bicycle to the level of LDC & GSP countries i.e., 0% from existing 14%.”
HMC has recently expanded its manufacturing operations in Punjab that will add 4 million units’ capacity, including 0.5 million units of E-Cycles.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.