Hero Motorcorp is building a lot of buzz in the industry these days.
First, the India-based company entered a deal with Erik Buell Racing, that saw them funding Buell’s race efforts in exchange for access to motorcycle technology. Then, rumour had Hero interested in actually buying into Buell’s company. Now, rumour has them interested in buying Italian motorcycle manufacturer Ducati.
Ducati is expected to be sold by owner Investindustrial later this year; asking price is expected to be around a billion pounds, if the company sells as a whole, instead of going public on the stock market. That sort of money is outside the reach of most bike manufacturers, but Hero is sitting on massive cash reserves. Company bigwigs are saying investment bankers have been lining up, trying to lend them the rest of the needed money.
While purists may throw up their arms in frustration over a deal like this, it’s not that crazy; Indian manufacturer Mahindra has been a part of owner of KTM for some time now. Hero ended a long-term partnership with Honda last year, and nobody was under any delusion that the association was degrading Honda’s bikes. The reality is that motorcycle manufacturing is like any other business; it’s all about the money, and if that money is in India these days, we can expect to start seeing changes in the industry.