Hero Seeks Ethanol Engine Partners to Tap Brazil, Kenya

Hero MotoCorp Ltd. (HMCL), India’s biggest motorcycle maker, is seeking partners for products such as blended-fuel compatible engines as it prepares to tap customers in Brazil and Kenya to combat sliding sales growth at home. “We continue to look for more tie-ups,” Managing Director Pawan Kant Munjal said in an interview in New Delhi June 4. “We are trying to build our own technology, our own capability through partnerships.” Hero, which in 2010 decided to exit a 26-year partnership with Honda Motor Co. (7267), aims to more than triple exports by 2017 as sales growth slows in its home market amid intensifying competition from Honda, Yamaha Motor Co. and Suzuki Motor Corp. The Indian motorcycle maker plans to start selling vehicles in Latin America and Africa by September, Munjal said. Tuning engines to run on gasoline combined with ethanol will enable Hero to benefit from rising demand in overseas markets including Brazil, Latin America’s largest economy, and Kenya, East Africa’s biggest, two countries where local requirements mandate the use of the blended fuel. Hero posted its slowest sales growth in 13 quarters in the three months through March, as Asia’s third-largest economy decelerated, expanding 5.3 percent, the least since 2003. Hero will also set up assembly plants in overseas markets either on its own or through local ventures, Munjal said.