When it was previously announced that Hero MotoCorp—the largest motorcycle manufacturer in India, with more than six million units sold last year alone in its exploding domestic market—and Erik Buell Racing had entered into a sponsorship agreement for EBR’s two-rider AMA Pro Superbike racing effort in exchange for receiving “support in terms of cutting-edge technology and design to develop future models”, there were some questioning whether more was involved in the agreement. There was speculation that Hero MotoCorp was also going to buy a minority ownership stake in Erik Buell Racing in exchange for that R&D support, as promoting another motorcycle company on the flanks of a motorcycle of your own design and manufacture is a fairly generous agreement otherwise. Buell had previously denied that there was any ownership exchange in the agreement, and judging by the aftermath of the previous Harley-Davidson joint venture debacle, it’s easy to see why the maverick American designer would be averse to another such partnership.
It appears that current economic conditions may have forced Buell to change his mind, however. According to a story in the Economic Times, the CEO of Hero MotoCorp stated that his company will indeed be purchasing a minority ownership stake in Erik Buell Racing for an undisclosed amount. There have been no details given on financial details of the deal, but as with any purchase of a company’s ownership stake, this will entail giving Hero a say as to what direction Buell takes in the future.
By dissolving its previous 27-year joint venture with Honda, Hero also got itself out of the shackles of that agreement that severely limited the company from exporting any of its products. The Indian company is looking at Buell assisting in its efforts to expand globally with an infusion of fresh technology and design. “As we turn global, which is our long cherished aim, EBR is a strategic fit that will help us gain traction in overseas markets," said Hero MotoCorp MD and CEO Pawan Munjal.