To rapidly scale up its international operations, Hero MotoCorp, India’s largest two-wheeler manufacturer, is considering fully-fledged manufacturing operations Colombia by the end of this year.
This would be Hero MotoCorp’s first initiative on manufacturing operations abroad since the termination of its joint venture with former partner Honda Motor Company. Currently, it assembles completely knocked-down units (CKD) through distributors in Bangladesh and Colombia.
The market size in Colombia is significant and the manufacturing unit would help the company expand business. “Indian two-wheeler companies would, sooner or later, look at setting up manufacturing units in Latin American, African and Southeast Asian countries. There is a lot of potential in these markets. For exports, freight costs are added to product prices and without local bases, it would eventually become difficult for companies to remain competitive, in terms of product pricing,” said Abdul Majeed, partner and leader (automotive practice), PricewaterhouseCoopers.
Industry sources say while about 6,00,000 two-wheelers are sold in Colombia every year.