Hero to be global hub for BRP-Powertrain

The signatories to the MoU were Hero Motors managing director Pankaj Munjal and Michael Mayringer, director - purchasing, BRP in New Delhi on April 28.

The MoU will help strengthen the strategic alliance between the two companies while also establishing Hero Motors as the transmission manufacturing hub. Furthermore, the company is exploring the potential of manufacturing light sport aircraft (LSA) engines in India with BRP, whose engines are used in snowmobiles, watercraft and sports boats, Can-Am quads and roadsters as well as in motorcycles, karts, ultra-light and light aircraft.

Munjal recalled that his company’s association with BRP started in a small way with supply of 5,000 transmissions which grew to 10,000 and to 60,000 now. “We have now become their global sourcing hub for transmissions,” he said.

Hero Motors has strategic alliances with BRP-Powertrain for engine components and transmission, Sumitomo Kiriu of Japan for automotive discs and Power Plate International of the UK for fitness assembly. Hero Motors’ clients include BMW, Bosch, GM and Toyota. The company recently tied up with OMVL of Italy for manufacturing miniature valves for gas fuel systems designed for small cars. At present, Hero Motors imports these parts for the aftermarket in India.

“There are four parts to the LSA — engine, avionics, composite and landing gear. We have a strong synergy for engines since BRP makes them and it gives us a big platform to enter this business. We have some big plans for this segment. There are no equity plans with BRP, only a supply understanding,” said Munjal.

Export growth

Hero Motors also plans to significantly increase its export levels which, at present, contribute 50 percent of its total turnover. “We expect exports to more than double this year,” said Munjal. The MoU with BRP- Powertrain envisages manufacturing transmissions worth US $ 250 million (around Rs 1,253.48 crore) over five years at its Ghaziabad plant whose capacity would be scaled up. Besides Ghaziabad, Hero Motors also has plants in Manesar and Pune.

The Pune plant makes corner modules for front suspensions and rear axle assemblies for supply to automakers in the region. In a related development, a few months ago, Hero Motors acquired the assets of Delphi (for corner modules for front suspensions) with manufacturing operations within the General Motors India plant at Halol.

Speaking to Autocar Professional, Rajesh Gulati, president and CFO of Hero Motors, noted that the company is hopeful of supplying corner modules of front suspensions and rear axle assemblies to many automobile manufacturers in the region from its Pune plant which has a manufacturing capacity of around 100,000 units per annum. “We have a capacity of 40,000 units at the Halol facility for exclusive supply to GM India.

The Pune plant caters to the demand for GM vehicles, besides other car manufacturers. We are also in talks with VW for supply to its new facility in Chakan,” he added.