India's Hero Motors Company (HMC) Group has said that Hero Cycles has successfully delivered its first batch of “Made in India” e-bikes to Europe.
The shipment, under the HNF brand of Hero International (HIT), marks the start of the Indian bicycle major's plan to become a leader in the European Union (EU) market, the company said this week.
The first batch of around 200 units has been delivered to Germany, with further units planned for the EU in future.
“The shipment marks a step forward to establish HMC as the largest fully integrated e-bike company in Europe, with a well-oiled manufacturing capability in India and brightens the prospect of India as a reliable supplier to the market other than China,” HMC said in a statement.
Hero International – the European bike and e-bike arm of HMC – said the company’s aim is to achieve an organic revenue of up to EURO 300 million by 2025, while adding EURO 200 million from inorganic growth.
“The first HNF branded bike built in India has landed on European shores. This is a big moment for the company and will demonstrate its ability to disrupt the market in Europe,” said Jeff Weiss, the London-based CEO of Hero International.
“Clearly, a major part of the future is e-bikes with e-bike sales expected to reach around 15 million units in Europe by 2030. We are confident that Hero is poised to become a market leader in this segment, making high-quality e-bikes fusing HNF’s engineering and design expertise with Hero’s manufacturing capability, especially with the 100-acre Cycle Valley in Ludhiana,” he said.
The company believes its latest batch of e-bikes to Europe overcomes the bicycle supply chain disruptions caused by the COVID-19 pandemic. While supplies dwindled and lead times for components increased manifold, consumer demand for bikes and e-bikes sky-rocketed.
To cater to this growing demand for bikes and e-bikes, Hero said it established its digital supply chain company – Hero Supply Chain (HSC) – a team specialised in logistics management and digital transformation. HSC is designed to act as a consolidated buying house for HIT and cater to the original equipment manufacturer (OEM) demand in the EU for supplies from India. Hero’s latest venture, Spur, will manufacture key components for bicycles in house, a move aimed at further de-risking the value chain.
“Where most of our competitors are struggling with supplies, the partnership with HSC allows uninterrupted supplies for bikes and e-bikes even in this high-demand period. Since HMC is also setting up component manufacturing in-house, the dependence on external component suppliers will be reduced,” Weiss added.
The European arm of HMC was created to cater to the booming European market by acquiring Avocet Sports in Manchester in the UK in 2016. Avocet Sports, later renamed as Insync Bikes, is one of the largest bike distributors in the UK, with more than 22 per cent market share in the kid's bike segment.
By 2019, the European market was drifting increasingly towards e-bikes, and demand for high-tech, light and durable e-bikes for sustainable commuting was growing. HMC decided to leverage its automotive manufacturing experience to venture into manufacturing premium e-bikes in India while acquiring HNF Nicolai, a premium German e-bike brand, to enter the European e-bikes market.
“Today, the bike market in India is valued at EURO 0.8 billion with 15 million bikes a year, whereas the European market is 15 times that of India. The e-bikes market, where the growth lies, is valued at EURO 5 billion for Europe, 50 times that of India, valued at EURO 0.1 billion,” said HMC Group Chairman and Managing Director Pankaj M. Munjal.
“With a conducive environment to thrive both in terms of infrastructure and policies, e-bikes were popular in Europe at a time the concept was in its nascence in India. Apart from a business decision, foraying into the European market was aimed at highlighting our strength – as market creators and leaders in India, we have much more to offer to the world… our vision now is to become the largest fully-integrated e-bike company in Europe,” he said.Hero Cycles, part of India's HMC Group, has a manufacturing capacity of 6 million bicycles per year and a network of plants located in Ludhiana (Punjab), Ghaziabad (UP), and Bihta (Bihar). It also has a state of the art manufacturing facility in Sri Lanka as well as a Design Centre in the UK. It also owns UK-based Avocet Sports, Germany-based HNF, and Firefox Bikes in India.