Hero MotoCorp Ltd. has announced that it will purchase a 48.2 percent stake in Erik Buell Racing Inc. (EBR) for $25 million. The transaction will take place over the next nine months.
The objective for Hero MotorCorp is to build up a line of better powered sports motorcycles than its competitors in India, including Honda. The Indian motorcycle market of sports motorcycles is still a low-volume segment, but the company sees it as a high-margin market with rapid expansion potential.
Hero MotoCorp hopes that this partnership will allow EBR to dominate the Indian sport bike marketplace while helping to sell the models in Europe and the U.S.