Should the Hero grab for Ducati prove successful, the purchase would add cutting-edge offerings like the $28,000 1199 Panigale S Tricolore to a company which currently has $1 billion – in cash – to a war chest built by making and selling motorcycles for as little as $768 in India. Does that sound like the strategy of another Indian vehicle manufacturer? Yep, it does. Hero seems to be following the Tata Motors Ltd blueprint (Tata makes the world’s cheapest car) who bought Jaguar Land Rover Plc in an effort to upgrade their technology and cachet in the marketplace.
“Ducati is a big brand and has a lot of technology, while Hero is looking to be a serious global player,” said Deepesh Rathore of IHS Automotive in India. “Hero might get it cheap. Thanks to the European slowdown, Ducati’s numbers haven’t been great.”
Only last month, Hero entered into a partnership with Erik Buell Racing which would allow Hero to sponsor two teams in the AMA Pro Racing National Guard Superbike Championship. What did they get for their money? Technology and design support for future Hero models from one of the iconic names in sport bike engineering.
Hero will face additional domestic competition from their old pals at Honda as the Japanese manufacturere is increasing operations in India following the split. Honda says it’s ready to spend big money on a third factory near Bangalore in southern India slated to begin production in 2013. That latest addition will give Honda the capacity to build 4 million two-wheeled vehicles in India per annum.
One of the hottest emerging markets for motorcycles, sales in India grew 15% in 2011 to 9.95 million units, and industry watchers say they expect those numbers to climb 11% to 14% this year alone.