Hero Cycles aims to achieve five per cent share in the global electric bicycle market by 2022 and moving a step towards fulfilling its goal, the company has acquired a strategic stake in German premium e-bike manufacturer HNF Group.
Hero Cycles has taken this stake together with German investment trust holding IBG Beteiligungsgesellschaft Sachsen-Anhalt mbH. The new joint venture between Hero Cycles and HNF will help the former in strengthening its presence in the European e-bicycle market.
According to top officials of the company, HNF will serve as the entry point for Hero Cycles in the European market. “We are in the process of making plans for the market. We are aiming for EURO 100 million business from HNF alone. In future, we may also cater to other countries from Germany. The company is set to dominate the market having finally established a base in Germany,” said Pankaj Munjal, chairman and managing director, Hero Motors Company.
Munjal said the company is looking for further acquisitions, partnerships in the region as part of its expansion plans.
“We are now looking to invest in Europe. We are searching for more and more partnerships in the components space as well as on the supplier side,” Munjal further said. Hero Motors Company plans to strengthen HNF with investments in design, brand, distribution and supply chain.
HNF will assume a larger role as it will emerge as center of excellence for electric bicycles and global research and development center for Hero Cycles, while Hero will bring in complementary strengths of the low-cost automotive-quality supply chain to HNF’s expertise.
HNF’s e-bike design and engineering strength will leverage Hero’s e-bike and bicycle businesses in global geographies. Initial assembly of parts would be done in India and the final assembly in Germany. Hero will benefit from low-cost manufacturing here, said the company.
Hero Cycles has in recent years forayed strongly into the ebike space through brand Lectro. With Europe leading the e-bike space with a 20 per cent year-on-year growth, Hero Cycles aims to garner a greater chunk of this market in coming years. The current turnover of Hero Cycles stands at `3,500 crore.