Hero MotoCorp begins sales in Colombian market

Hero MotoCorp has begun retail sales in Colombia as six of its motorcycles went on sales in 120 outlets spread across the country. The company plans to expand its distribution network to over 150 outlets in a year’s time. The products include the 100cc Splendor iSmart, Eco Deluxe, and Passion-Pro, the 125cc Glamour, the 150cc Hunk and the 225c Karizma ZMR. 

The company also became the first two-wheeler company in Colombia to offer a four-year warranty on all its models. 

This July, Hero MotoCorp formed a wholly-owned subsidiary in Colombia and commenced construction of a state-of-the-art manufacturing plant in the country. The 100 percent subsidiary – HMCL Colombia SAS – has been incorporated in the industrial city of Cali, 300km southwest of Bogota.

With a project cost of US$ 70 million (Rs 432 crore), HMCL will invest US$ 38 million (Rs 234 crore) in capex, with the rest being utilised as working capital over the next three-year period. The equity investment will be made through HMCL’s wholly-owned subsidiary in the Netherlands –HMCL BV.

The manufacturing plant, which is spread over 17 acres at the Parque Sur Free Trade Zone in Vila Rica, is expected to go on stream by mid-2015 with an initial installed capacity of 78,000 units. This will go up to around 150,000 units by 2017-18. With this, the New Delhi-headquartered Hero MotoCorp will be the first Indian two-wheeler company to have a manufacturing plant in Latin America.

HMCL’s new subsidiary will act as a hub for selling to the Andean countries and to Central America. It can also be a strategic base for shipping to North American markets such as Mexico and the US.

According to Pawan Munjal, vice-chairman, CEO and managing director, Hero MotoCorp, "In the process of expansion and localisation, we will generate immense opportunities, thereby contributing to the overall development of Colombia. Our vision is to provide convienient, fuel-efficient mobility, and we are confident our products will appeal to customers across the demography."

Hero MotoCorp, in partnership with its local distributors, also operates three assembly plants in Africa – in Kenya, Tanzania and Uganda. With two more new plants coming up – one in Colombia and the other in Bangladesh through a joint venture – the company is fast building up a global manufacturing base to cater to growing international markets.

HMCL, which has aggressively expanded its global footprint since it broke away from erstwhile partner Honda Motor Co in December 2010, today sells its products in India, Sri Lanka, Nepal, Bangladesh, Turkey and Egypt in Asia; Peru amd Ecuador and now Colombia in South America; Guatemala, Honduras, El Salvador and Nicaragua in Central America; Kenya, Mozambique, Tanzania & Uganda in East Africa; and Burkina Faso, Ivory Coast, Congo & Angola in West Africa.

Hero MotoCorp plans to launch its operations in Europe by 2015 and in the US by 2016.

In India, the company sold a record 6.25 million two-wheelers in 2013-14, its highest-ever sales for any financial year. In August 2013, Hero also became the first Indian two-wheeler company to reach the historic milestone of 50 million unit production.

By the year 2020, the company aims to surpass 100 million units in cumulative production, annual bike and scooter sales of 12 million units. It also plans to have more than 20 manufacturing and assembly plants across the globe with sales in more than 50 countries by that year.