Hero MotoCorp, the world’s largest two-wheeler manufacturer and the domestic market leader, is upping the ante on its global manufacturing footprint. The company, which entered the growing Southeast Asian market by commencing operations in the Philippines on August 1, 2024, plans to now bring Brazil into its ambit.
In an investor presentation earlier this month, Hero MotoCorp has confirmed that operations will start in Brazil in Q4 FY2024 (January-March 2025). However, no other details about production capacity have been mentioned.
In May this year, the company had said it had plans to set up a new wholly owned subsidiary in Brazil, to manufacture and distribute two-wheelers, including parts and accessories. The Brazilian operations is most likely to be named ‘Hero MotoCorp do Brasil Ltd’, with investment in phases
Hero MotoCorp is witnessing demand rise for its exports – the 73,731 units in April-July represent a 33% YoY increase and comprises 62,199 bikes (up 35%) and 11,532 scooters (up 21%). The company currently has four overseas assembly plants – in Bangladesh (150,000 units per annum), Colombia (80,000 per annum), Nepal (75,000 units per annum) and the Philippines (150,000 units per annum). The planned one in Brazil will be its fifth.
Brazil, as is known, is an ethanol-friendly market. In January 2024, Hero MotoCorp had showcased its first three prototypes of flex-fuel motorcycles – the ethanol-based Hero HF Deluxe, Splendor Plus and Glamour – at the second edition of Hero World at its R&D hub, the Centre for Innovation and Technology (CIT) in Jaipur.
LATAM AND BRAZIL: PROMISING BUSINESS OPPORTUNITY
With two-wheeler exports to key African markets coming under pressure due to challenging inflationary conditions which impact two-wheeler purchases, Indian OEMs are looking to diversify into other global markets and Latin America is a promising business opportunity.
Brazil, the largest in the region, is one such market. In June 2024, Bajaj Auto commenced operations at its new plant in Manaus, Brazil. The plant has a single-shift capacity of 20,000 units per annum, scalable to 50,000 units. Royal Enfield has five CKD assembly plants worldwide – Thailand, Argentina, Colombia, Brazil and Argentina.
Lead image: Hero MotoCorp