HERO

Signalling the coming of age of Indian auto component makers, Hero Motors has bagged a contract to become the sole international supplier of gearboxes for BMW’s motorcycles for both domestic and global markets. Gearboxes are one of the most critical parts in an automobile and involve high-end engineering.

Hero Motors is part of the $4.5-billion Hero Group.

Pankaj Munjal, managing director, Hero Motors, said, “We have developed the gearbox ourselves. Usually, components such as engines and transmissions are made by the company itself, as they involve advanced technology. We have achieved the expertise. BMW Motorrad will source gearboxes from us for products it sells globally.” The agreement would be for five-eight years depending on the transmissions sourced for different products by BMW Motorrad.

The deal was closed on Tuesday. “That Europe is the best place for sourcing automobile components is not necessarily correct. The landscape is changing. Our transmission business, for one, has been growing over 70 per cent a year for the last few years”, said Munjal.

Indian companies export over $5 billion worth of automobile components in a year.

BMW Motorrad saw 12.3 per cent growth in the last financial year and sold 110,000 motorcycles.

The company is already executing contracts worth over $200 million for supplying components to a Canadian company, Bombardier Recreational Products, and Germany’s BMW.

BMW’s motorcycle business is not new to India. It has had a long relationship with Hero Motors. BMW Motorrad forayed into the Indian two-wheeler market in the mid-1990s in partnership with Hero Motors with a mid-sized single-cylinder motorcycle. While it sold a few bikes, the venture was closed due to the small size of the Indian superbike market that time.

BWW Motorrad is now back. It started selling products in India in December last year. The models are imported as completely-built units. They are priced upwards of Rs 18 lakh and distributed through Deutsche Motoren, New Delhi, and Navnit Motors, Mumbai. Hero Motors provides end-to-end engineering solutions. Its customers include Maruti Suzuki, Toyota, BMW Hero Honda and Rotax. It has two plants in Ghaziabad where it produces transmissions, sheet metals and gear boxes, and one at Manesar in Delhi-NCR. Its two other facilities are in Halol, Gujarat, and Talegaon, Pune.