Hero MotoCorp Buys Large Stake In Erik Buell Racing

Erik Buell, once bitten after Harley-Davidson acquired his company and then closed it down, isn’t twice shy about accepting new capital to expand his business. This time, however, Buell is retaining majority ownership––just barely––of the company he founded, selling 49.2 percent of Erik Buell Racing to Hero MotoCorp, the largest motorcycle manufacturer in India.

EBR and Hero have been working together since Hero began sponsoring two teams in the AMA Pro Racing National Guard Superbike Championship in 2012. As part of that deal, Hero received input and technological expertise from EBR for future models, and the two companies explored bringing Buell bikes into the Indian market.

This new collaboration will allow Hero to use EBR as an R&D partner, and give EBR the funding to expand its own sales and manufacturing capabilities. Ravi Sud, the CFO of Hero, is optimistic––some say wildly so––about increasing Buell sales from the 65 units sold in 2012 to about 20,000 in 2017.

Hero’s initial investment of $15 million in EBR will be increased by another $10 million in the next nine months. New Delhi-based Hero has already brought in several designers and engineers from EBR’s East Troy, Wisconsin, plant to work with its 300-member development team. Meanwhile back home, Erik Buell will remain the majority owner of EBR, and says he has no plans to sell any more equity in his company any time soon.