Hero MotoCorp Approves Closure Of North America Subsidiary

In a meeting of the Board of Directors of Hero MotoCorp on October 23, 2019, a decision was taken to dissolve Hero's wholly-owned subsidiary, HMCL (NA).

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Hero MotoCorp has decided to dissolve and close down its North America subsidiary

Highlights

  • Hero's Board of Directors decides to shut down North America subsidiary
  • Hero had ambitious plans for the US and Canadian markets
  • For now, Hero's North America plans seem to have been put on hold

Hero MotoCorp, India's largest two-wheeler manufacturer by volume, has approved the dissolution and closure of its wholly-owned subsidiary, HMCL (NA) Inc. in the USA. The resolution to dissolve the wholly-owned subsidiary, HMCL (NA) was taken after a Board Meeting held on October 23, 2019 and was approved by the Board. The process of dissolution is expected to be complete in the next six months, and HMCL (NA) will initiate the process of dissolution with the Delaware Secretary of State. There will be no buyers for the subsidiary and it will be completely dissolved, HMCL said in a filing with the Bombay Stock Exchange.

In 2013, Hero MotoCorp had announced plans to roll out the company's two-wheelers in the United States and Canada, appointing its erstwhile partner, Erik Buell Racing as the exclusive distributor with plans to eventually set up manufacturing and assembly plants in North America. While the thoughts then was that North America could have a market for smaller displacement motorcycles, although primarily the US and Canadian markets have traditionally been for heavier and more powerful bikes, with engine capacity of over 600 cc.

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In July 2013, Hero MotoCopr acquired 49.2 per cent stake in Erik Buell Racing. But by 2015, EBR filed for receivership and ceased all operations. By then, EBR also passed into new ownership, and Hero acquired EBR's consulting business. While that partnership failed to take off without any meaningful venture into new product development, it seems now Hero MotoCorp has put its ambitious North America plans on hold, at least for the time being, with the dissolution of the subsidiary.

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