Erik Buell gets a USD 20 million cash infusion to build a new $20,000 motorcycle: HeroMotoCorp the investor?
Erik Buell Racing(EBR) and Hero MotoCorp entered a tie up earlier this year, a venture in which EBR would help Hero MotoCorp develop high performance motorcycles while the latter would invest in EBR in its racing effort. The two companies are contrasts of sorts. Hero MotoCorp, by the virtue of being the world’s largest two wheeler maker by volumes, is rolling in cash while Erik Buell Racing has been scraping along after founder and former Harley Davidson engineer Erik Buell found himself and his company in the woods after Harley decided that Buell’s range of motorcycles doesn’t fit into the Harley Davidson’s portfolio.
That said, Erik Buell Racing comes with a solid engineering and research set up for new product development, especially in the high end sportsbike segment. This is what Hero MotoCorp would be looking at, to come up with high end sportsbikes, as the research capability of Hero is far from being optimal, given the two wheeler maker’s heavy reliance on Honda, its erstwhile technology partner. With Honda going it alone in the Indian two wheeler market and exiting its long term joint venture with Hero, the need for new technology has become more acute than ever before.
Now we’re hearing that Erik Buell has just received a cash infusion of USD 20 million to develop a $20,000 motorcycle for launch in the next couple of years. The cash infusion is said to be used to develop a new affordable motorcycle for the high end sportsbike market. However, the identity of the investor has not been revealed just as yet. Speculations suggest that it could be Hero MotoCorp, which is the investor responsible for the cash infusion as the company already sponsors Erik Buell Racing’s racing effort at the AMA superbike racing championship.
However, both Hero MotoCorp and EBR remain tight lipped about the identity of the investor. So, all we can do is to speculate. All said, a new motorcycle from Erik Buell is definitely something that superbike enthusiasts would be looking forward to, given the various unconventional touches that abound Buell motorcycles. Apart from the initial 20 Million USD cash infusion, more such infusions are expected to be made in the coming months as the development of a new motorcycle would cost much more than $20 million. Perhaps then, we’ll get a clear picture on who the real investor behind these new infusions is.