India’s Hero Cycles aims to leverage ties with Yamaha, Mitsui to promote e-cycle sales overseas

11, Aug. 2020

An undated file photo of a worker loading one of Hero Cycles’ products into a truck at the company’s factory in the northern Indian state of Punjab. (Photo courtesy of Hero Cycles)
An undated file photo of a worker loading one of Hero Cycles’ products into a truck at the company’s factory in the northern Indian state of Punjab. (Photo courtesy of Hero Cycles)

By Atul Ranjan

NEW DELHI, NNA - India’s biggest bicycle maker Hero Cycles Ltd. aims to leverage its partnership with Japan’s Yamaha Motor Co. and major trading house Mitsui & Co. to drive sales of e-cycles in overseas markets as it expands its local manufacturing capacity, according to a top Hero official.

“While the alliance is currently focusing on the domestic market, it’s also considering expansion to other markets, though it’s still in the discussion phase,” said Pankaj M. Munjal, chairman and managing director of Hero Motors Co. (HMC) which operates Hero Cycles.

The e-cycle segment “has received a positive response from consumers, and it’s believed that it will continue its growth,” Munjal told NNA in an email interview.

Last year, the company unveiled its first e-cycle brand developed by the alliance, Lectro EHX20. Its motor was imported from Yamaha, while the e-cycle was manufactured at Hero Cycles’ Ghaziabad-based unit in the northern Indian state of Uttar Pradesh.

Hero, Yamaha and Mitsui tied up to tap India’s electric bicycle segment in 2018.

According to Munjal, Hero is in the process of setting up new manufacturing units to produce medium-to-high-value bicycles including e-cycles, among other categories of bicycles, in the northern Indian state of Punjab. It is ramping up its production capacity to around 10 million units a year from the current 5 to 6 million units, he said.

The company has taken several initiatives to gain traction in the global electric bicycle market, such as bolstering its capacity in research and design innovation and forming strategic partnerships and global acquisitions, he said. Earlier this year, it acquired German e-bike maker HNF Nicolai, a brand that specializes in high-end bicycles.

Munjal said that the e-cycle category in India is fairly new and is growing fast, with the current domestic market size estimated to be in the range of 30,000 to 35,000 units per annum.

Hero marked 100 percent growth in electric cycles in the post-coronavirus-induced lockdown period in June and a similar order flow for July, and is “happy to witness this transformation of e-cycles and the way these are expected to revolutionize the way people commute,” Munjal said.

Munjal noted that sales of premium category cycles, including e-cycles, jumped as more people turned to them for recreation and exercise as lockdowns curtailed gym and group workouts, especially in big cities.

Hero increased its overall share in India’s bicycle market to 44 percent from just under 32 percent in the last 15 months, and aims to achieve 50 percent by March 2021. Munjal estimated that Hero has about an 80 percent market share for e-cycles.

According to the All India Cycle Manufacturers’ Association, over 16.4 million bicycles were sold in the country during the fiscal year ended March 2019.