Verlicchi-Hema Group tie-up for two-wheeler parts

Verlicchi, the Italian two-wheeler parts maker, will make its India entry through a joint venture with Hema Group, a components supplier based in Gurgaon.

The joint venture, to be known as Verlicchi-Hema Automotive Co, will establish its first facility at Hosur near Bangalore at an investment of Rs 17 crore.

“Verlicchi wanted to enlarge its footprint across the world, India is a booming country, but it produces only 70 lakhs motorcycles annually compared with 2.5 crore in China.So it has a great potential,” Verlicchi Group Managing Director Alessandro Verlicchi said.

The Hema Group has said that the company’s main focus will be to produce frames.

It will also make exhaust systems, rear forks, fuel tanks, and other fabricated parts.The company also plans to export frames from its India facility to the U.S. and the European market by 2011.

Hema Engineering Industries Group managing director Chandresh Jajoo said that the was aiming at a turnover of Rs five crore in 2010.

“Depending upon demand, we will set up more facility in the coming years as we aim to increase our turnover to Rs 25 crore in the next three years,” Jajoo added.

Reports say that the Verlicchi-Hema Automotive JV plans to export frames from India to the US, and Europe, by 2011. Verlicchi was quoted as saying that the JV aims to garner a 15-20 percent share in India’s two-wheeler market.

Verlicchi is a known name in the global market, boasting of three manufacturing facilities in Spain, Italy and the US.

Verlicci’s clients include BMW, Harley Davidson, Ducati and Honda. Meanwhile, the Gurgaon-based Hema Group makes forks, nipples and rear forks, and exhaust systems.

Its clients include Hero Honda, TVS, Yamaha, Royal Enfield, among others.

The new JV would go on stream soon with production starting from the new facility, by November 2009. The facility would have an initial capacity of three-lakh frames annually, expandable up to five-lakh units.