Hero Begins Argentina Operations With First Global Product Launch

Hero MotoCorp has added yet another global market on its way to achieving its target of selling in 50 markets by 2020. The launch of operations in its 35th market, Argentina began with the opening of the brand's first dealership in Buenos Aires, and also the company's first global product unveil outside India.

Hero MotoCorp Enters Argentina

Hero has taken the wraps off the new generation of its popular 125 cc motorcycle Glamour, which will be badged Ignitor for the Latin American markets like Colombia, Peru and of course Argentina too. “We have a huge focus on South America, as we believe we will get substantial volumes from the region. But even so, in the short term only 10 per cent of our overall sales will come from outside India.” Said Pawan Munjal Chairman, MD, and CEO, Hero MotoCorp.

Hero MotoCorp Chairman, MD, and CEO Pawan Munjal

Hero has stepped into Argentina with 4 products for starters - the Ignitor (Glamour), Hunk, Hunk Sports and the sole scooter offering - Dash (sold in India as the Maestro Edge). It has appointed Argentinian partner Marwen SA as its distributor for this market. Marwen also has an existing facility to assemble motorcycles that Hero will use to roll out products in Argentina. The plant based at Villa Rosa in Buenos Aires province has a capacity to churn out 5000 bikes a year. To begin with Hero will ship kits that will be assembled at this plant, from its manufacturing base in India - and not from the plant it has in Colombia, as that is more cost-effective. In the future once the Colombian operation achieves more scale and Hero is able to increase local content, it might look to change this.

Pawan Munjal, Chairman, MD & CEO, Hero MotoCorp with the President of Argentina Mauricio Macri

The Argentine two wheeler market used to be 700,000 units a year, but due to the country’s bad economy has shrunk to 500,000 units in 2016. That though is expected to change as the new government has spurred the economy onto a growth path. Hero will have 40 dealerships in the Buenos Aires region in the immediate future, and 95 dealerships across Argentina by the end of 2017. Hero wants to aim at being a top-two brand in Argentina over the next 2-3 years. It has signed national hero and football coach of the national team (and of Spanish football club Atletico Madrid) Diego Simeone as brand ambassador. This is the second global sportsperson Hero has signed on after Tiger Woods.

The Hero MotoCorp Lineup

The local market here in Argentina is currently fragmented and a lot of local players sell Chinese-sourced bikes in large numbers. This includes current market leader Motomel. Pawan Munjal told NDTV, “We will differentiate our products on after sales and fuel economy. We hold a definite edge over Chinese brands and products on performance, parts, durability and distribution models.” Fellow Indian brand Bajaj has already been selling its bikes in Argentina, and brands like Honda and Suzuki are also present here as rivals to Hero.

Hero is very keen to look at entering other South American markets

Hero is very keen to look at entering other South American markets like Brazil and Chile. But its key priority is to now look at beginning operations in Mexico as it views that as a key volumes market in the Latin American region. It has had a failed partnership in Mexico, and hence there is a delay in entering that country, but when quizzed on this topic, Mr Munjal has said that Mexico will be sooner than later for Hero. The company will also open its plant in Bangladesh in March 2017.