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Neha Kaushik

Apart from consolidating its position in the two-wheeler space, Hero Motors is looking to establish its position as a leading components supplier.

New Delhi , March 6

ITALIAN automotive giant Piaggio may enter the Indian two-wheeler market through the Rs 250-crore Hero Motors.

It is learnt that Hero Motors held discussions in this regard with the Managing Director of Piaggio during his visit to India last month.

A Hero Motors official, when contacted, confirmed that the company was in talks with Piaggio to introduce the latter's scooters in the Indian market. "We are currently in talks with Piaggio. There are operational synergies. We would be in a position to say something concrete in this regard in a month's time," Mr Yadvendra Sahai, Vice-President, Hero Motors, said.

Hero Motors had last year announced a tie-up with two-wheeler maker Aprilia to introduce the company's scooter in the Indian market. The tie-up was, however, recently called off after Aprilia was taken over by Piaggio. Last year, Hero Motors had even announced that Aprilia was considering acquisition of 20 per cent stake in the company for about Rs 100 crore.

Market analysts point out that in order to fund its expansion plans in the current scenario, Hero Motors however may consider offloading 20 per cent to a strategic investor. Meanwhile, apart from consolidating its position in the two-wheeler space, Hero Motors is looking to establish its position as a leading components supplier.

"We are targeting a revenue of about Rs 1,200 crore in three years, and expect a majority of that to come from components and engineering services," Mr Sahai said. Besides further developing its sheet metal components and engine machining business, Hero Motors is also studying the possibility of manufacturing castings.

Meanwhile, the company has recently developed engine components for the 400 cc range of Bombardier all-terrain-vehicles (ATV), the supplies of which will begin from the first quarter of 2005. According to the company, a high-powered Rotax team is working along with Hero Motor's engineering division to develop this outsourcing programme.

Hero Motors has already delivered the first lot of gearboxes to Bombardier Rotax, Austria, which will be used on ATVs manufactured by Bombardier Recreational Products, Canada, for the entire North American market.

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