Hero MotoCorp, on Tuesday, announced a joint venture with Italy-based Magneti Marelli for production of powertrain systems for the two-wheeler market.
60:40 venture
According to the agreement, Hero MotoCorp will hold 60 per cent stake in the joint venture, while the balance will be held by Magneti Marelli.
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Construction of the joint venture’s production plant is planned by 2015, at a location to be defined shortly, the company said in a statement. The joint venture will nevertheless be operational immediately, as during this initial phase activities will focus on the technological aspect, with the two companies starting to cooperate in the design and development of the first solutions and applications for motorcycles, the release added.
“The scope of this agreement is quite significant for Magneti Marelli as our partner in this JV is the world’s largest manufacturer of two-wheelers. The aim is to partner with Hero MotoCorp to equip with advanced Powertrain solutions to all Hero two-wheelers and most of the two wheelers circulating in a country where current sales are already in the order of 15 million per year,” Magneti Marelli CEO Eugenio Razelli said.
Pawan Munjal, Managing Director and Chief Executive Officer, Hero MotoCorp, said, “This is our first joint venture since charting our solo journey, and as an immediate opportunity and focus area, the new firm shall be taking up development and manufacturing of next-generation fuelling systems.”
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Magneti Marelli, which designs and produces advanced systems and components for the automotive industry around the globe, reported a turnover of 5.8 billion euro in 2012.