Briggs Stratton Spreading Wings In India
Briggs
& Stratton has chosen
India as its new market for expansion. Briggs & Stratton has
joined hands
with Hero group well known for their joint venture with Honda, in India
and
floated a joint venture called Hero Briggs & Stratton which
will produce
transmission systems and engine for three and two wheelers.
Hero
Motors have transferred their
engine manufacturing plant to the new joint venture company in which
both the
partners are having a fifty percent each equity shareholding. The total
project
cost being 200 million US Dollars for which each of the partners will
be
bringing in 12.5 million US Dollars and the balance to be funded
through
financial institutions. The new joint venture is expected to produce
150000 two
stroke engines and 200000 transmission systems each year. The Joint
venture
would shift to production of 4 stroke engines after two years of start
of the
manufacturing facility.
Though
the Hero
Group already has joint venture with Honda, it chose Briggs &
Stratton as
its partner as the company is greatly renowned in the field of small
engines.
Briggs & Stratton is an established player in the 50cc to 150
cc engines
worldwide and an established market leader.
Before joining hands with Briggs & Stratton the
Hero Group had held
negotiations with two of Briggs & Stratton’s rivals
including Ricardo but
eventually decided to drop those proposals and join hands with Briggs
&
Stratton to make their joint venture one of India’s largest
small engine
producer.
Hero Briggs & Stratton is expected to export a major portion of
its produce
to meet its export obligations to meet the statutory requirement of a
foreign
joint venture in India. The balance production will be sold to Hero
Motors and
Hero Honda as OEM equipment for their two and three wheeler productions.