Hero Motorcorp Ltd (HMCL) has purchased 49.2 per cent stake in American racing firm Erik Buell Racing. Hero plan to invest USD 25 million (Rs 150.5 crore) in two trenches, with USD 15 million (Rs 90 crore)currently and a further USD 10 million (Rs 60.5 crore) within 9 months.
Hero will have two members representing the organisation at the board level, along with an observer. The EBR founder Erik Buell though, will remain as the Chairman and CEO of the organisation.
Hero already has a strategic alliance with EBR, with the later contributing towards motorcycle design and hybrid scooter development. From 2012, Hero has also been a major sponsor of the EBR AMA American Super Bike squad which consists of a number of Hero technicians.
Since the departure of Honda form the Hero group, the company has been lacking in R&D and engineering development, and this collaboration with EBR is expected to fill the void created by Honda’s departure.
On the flip side, EBR benefits from the monetary investment which will aid them to produce their USD 40,000 (Rs 24 lakh) superbike dubbed 1190RS. EBR also has a number of other variants in the pipeline that they intend to introduce in the coming years.