| Author | Message | ||
     Buellerxt |
Interesting times! Hope this is ALL for the very best. http://www.bizjournals.com/milwaukee/news/2013/07/ 01/hero-motocorp-buys-492-stake-in.html | ||
| Pdento |
Sounds like good news. Now when is he going to start producing new bikes. That is the question | ||
| Ratbuell |
Already up to 2 pages of posts in quickboard... | ||
| Petro_freak |
Good news for India, I guess. But I am not sure how EBR is going to benefit from this. Any ideas ? Cheers... | ||
| Hughlysses |
But I am not sure how EBR is going to benefit from this. Any ideas ? They've got $15M in the bank today that they didn't have last week with $10M to follow later this year. That'll rent a lot of building space, buy a lot of assembly line tools, pay a lot of suppliers, and hire a lot of workers to build new bikes. | ||
| Hughlysses |
More info in this article, including some quotes from Erik: http://www.jsonline.com/business/indias-hero-motor corp-takes-492-stake-in-erik-buell-racing-b9945389 z1-213842871.html | ||
| Buewulf |
Well, now, that is a game changer. With Hero's money and production capabilities available, some interesting things might start to happen. | ||
| Tootal |
At least he owns over 50 percent still. Helps keep the rug under your feet! | ||
| Petro_freak |
Hero is a low cc motorcycle manufacturer in India, who's inventory consists of small 100cc mopeds and scooters serving the price & fuel economy conscious populace of India. They are primarily focused on the Middle-Lower Mid-Commuter class in India, however they do have some off the shelf products to compete in the medium (150+ cc) category. These categories are ruled by Bajaj, Honda, Suzuki, TVS, Yamaha (mostly in that order). I don't see how buying EBR will help them in improving their market share with this deal. From the links above I read that Hero is planning to expand their foothold in the international market. If that's true, then why invest in a firm that deals with niche category racing/road-going motorcycles ? But, recent trend among the Indian motorcycle manufacturers has been to collaborate with the Japanese or outright acquire (Bajaj-KTM deal) and to release a smaller cc version of their best selling motorcycles. The middle class to upper middle class spending spree in India has been fueling the sales of higher cc motorcycles like Ninja 250 (twin), CBR 250 (single), KTM duke 220/390 (Single), CBR 600, R15, R6, R1 and now HD ! So you get the picture. Hero has been struggling to enter this segment and now looks like they have someone with the technology and the know how about bigger motorcycles. I would bet on Buell Blast being released soon in 350cc single version. The reason I am more worried about is, I hope they don't start controlling EBR if the sales in the future or some nonsense drops and hurts their investment. Let's face it, at the end of the day it's a business deal. So there has to be profit/returns somewhere down the line. I hope they help EBR expand it's capacities in US and one day, hopefully one day EBR help the older generation Buell motorcycles again ! Cheers... | ||
| Nateba |
Didn't Buell hate the blast and the money that Harley forced them to put into developing it? When they announced that they would no longer be making them, the ad showed a Blast being crushed in an automobile crusher. After all the lessons learned with Harley, would EBR agree to go down that route again? (Message edited by nateba on July 02, 2013) | ||
| Electraglider_1997 |
Let me preface this with, "I wish all the best for EBR". First thing that comes to mind is that Harley bought the same stake in Buell and eventually they pulled the plug. Now Hero injects some capital for a 49.2% share of EBR. Let's hope that history does not repeat itself. For those of you that like to get your digs into Harley on a regular basis because of what happened in 2009, Hero may become your next whipping boy sometime in the future if EBR becomes to self indulging. I don't think he has sold anywhere near even 100 of his $40K+ bikes. If I'm incorrect then let me know. If all EBR does is make cheaper versions of his current bike then hopefully somebody will want them. I feel pretty certain that plenty of folks would love to buy a Rotax powered adventure bike. Didn't the ULY sell better than all his other bikes? Blast doesn't count since most of those were sold to be used in the Rider's Edge programs at Harley dealers. What a piece of crap that bike was. Lousy, jerky, over braked training bike. I'm an MSF RiderCoach so I do have experience with those bikes. I witnessed plenty of crashes because of the overly strong front brake on that turkey. Crappy clutch with almost zero friction zone. Was very happy when the last one of those dogs was gone from out program's stable of bikes. I know I've offended some here but then again it is only my opinion so don't ge too out of wack. | ||
| Petro_freak |
Of course, all the very best to EBR ! No two words about that for sure. But, like you say I hope history doesn't repeat itself. Cheers... | ||
| Hughlysses |
Didn't Buell hate the blast and the money that Harley forced them to put into developing it? When they announced that they would no longer be making them, the ad showed a Blast being crushed in an automobile crusher. After all the lessons learned with Harley, would EBR agree to go down that route again? That "cubing the Blast" business was pure marketing hype. Buell apparently liked the Blast and initially had great plans for it (like a sportier 650cc variant for instance) but HD completely torpedoed its chances. For one thing, the HD-built engine cost FAR more than projected, which drove the price of the bike up so that it was barely competitive with far more sophisticated import offerings. The problem with HD's involvement with Buell was that he eventually let them acquire the vast majority of the company. Erik's retaining controling interest in EBR for the foreseeable future. | ||
| Nateba |
Hughlysses- That's what I was thinking but wasn't able to articulate. The blast engine cost so much that the competing imports had a more sophisticated product for the same cash. I guess it's a catch-22 that in order to become a serious competitor in the motorcycle industry, you have to get large funding from somewhere; and that means giving up some control. | ||
| Reepicheep |
Buell built a great bike in the Blast... it was screwed up to the degree that Harley couldn't build a cost competitive motor for it, but mandated Buell use it, then mandated the selling price for the bike (which the market was mandating also), then Harley bitched because there wasn't enough margin in it, all while making profit hand over fist on their inflated engine price. Over-braked? Lol. That's like having an over-beautiful significant other.  | ||
| Electraglider_1997 |
I've seen so many brake related wipe-outs over the past few years and I notice it is always when the front disc brake is more powerful than necessary for training bikes. Not all of these bikes are destined for the MSF course so they put a brake on the bike that is more suited for the bikes sold to private citizens than the ones sold for low speed training courses. Nothing I can do about it but warn the students but it is something I see most every class. Maybe it is good they get a crash in while in class so they get a taste of the pain, but just a taste of course. | ||
| Reepicheep |
Makes sense. I hate to see anyone crash, but looking back, I'd rather come out of an MSF class and getting on my first "real" bike and thinking "dang, this front brake sucks, and needs to be improved" rather than thinking "that's normal". Sportbike level braking (and braking skills) on my Uly probably saved me from an even more serious injury (as it was I got away with just a cracked pelvis and cracked molar). | ||
| Froggy |
The firm they are investing in already is providing R&D and is helping them design new models. Hero sees great potential in EBR, and given that they are already establishing a dealer network, Hero can try and piggy back on top of it.
Yep, after losing Honda, they picked up EBR, it is still early but so far it looks great for both sides.
Erik isn't going to let that happen. He passed up offers from some other major manufactures that tried it when EBR was just starting out.
It was just an ad, Buell still made 2010 Blasts, in fact they made more Blasts for 2010 than every other bike combined.
He sold so many he built more with some improvements like additional weight loss. I don't have exact figures on how many from each model year have sold though.
Nope, it was about average, most other XB models outsold the XB12X. If you include the Blast (which I know you don't want to), that outsold the Uly 3:1. It will be interesting to see what happens with the additional funding, but I see nothing but good things on our horizon. | ||
| Buewulf |
The Hero deal has the potential to be much different than the HD deal. The size of the investment indicates that Hero sees much more value in EBR than just R&D resources. They clearly believe that there is some serious money to be made. I think Hero has a pretty grand vision of where they want to be 10 years from now, and the acquisition of EBR is a logical step for them. Since speculation is fun, here are some things that I think Hero may value in EBR besides engineering: 1) Brand: Erik Buell the person has some pretty decent brand power. Even enthusiasts who were never enthralled by the machines produced by Buell have respect for the man himself and his passion and talents. EBR's involvement in projects introduced under the Hero and EBR brands will have some built in recognition and credibility. 2) Established race program: I believe Hero wants to be a major force in the global market, and they may think lining up alongside Honda , Yamaha, etc. on the grid at some point in the future as a necessary step. 3) Existing large-displacement platform: EBR clearly has a platform that can spawn multiple models. With Hero's money and production expertise, they could gain decent market share in a segment that Hero didn't previously have an in on. 4) Supply chain relationships in the developed world: The past relationships the EBR team established during the Buell era will make it much easier to develop a good dealer network and parts distribution business in North America and Europe. This will be interesting. I don't think EBR could have survived without this infusion. Even with the money, I think it will be a tough road for EBR. The top-tier sportbikes are so good these days and relatively cheap considering the level of performance you get right out of the box. It is hard to imagine there is much margin in liter-bikes right now. Anything EBR introduces into the market to compete with those beasts will have to be stellar. Same on the big adventure bike market right now, though I think margins are probably pretty healthy there at the moment. Like Ducati, I think EBR had better have a "Monster-ish" line of bikes in the pipeline to brace the pillars. | ||
| Hughlysses |
I just had another thought on this whole deal. I suppose most of you have seen this pic from the first road test of the Uly in Cycle World back in 2005:  What if some (most/all?) of those parts being imported from various manufacturers outside of the U.S. could be produced "in house" by Hero in India meeting EBR quality control requirements? It would certainly be in Hero's interest to do that, and now they're not selling parts at a profit to an outside company, they're producing them at cost for a company that they own a substantial portion of. That benefits Hero from learning how to manufacture world-class parts, and benefits EBR by reducing the cost of these items substantially, and by having the parts produced by a "highly motivated" supplier. |
