Hero partner Erik Buell Racing files for bankruptcy

American motorcycle maker Erik Buell Racing, co-owned by Hero MotoCorp, has shut operations and filed for bankruptcy protection from creditors.

Hero MotoCorp said in a statement that Erik Buell Racing and its subsidiary Erik Buell Racing LLC have filed an Assignment for Benefit of Creditors under Chapter 128 of the Wisconsin Statutes, which is similar to the federal bankruptcy law of the US, and have ceased their operations.

Hero had made the acquisition as part of its strategy to enhance technological prowess, after the break-up of its joint venture with Honda.

The company had earlier entered into a technology sourcing pact with EBR in 2012 to strengthen presence in the high-end bike segment. The move was part of the Pawan Munjal-led company's overall strategy to have multiple technology sources for different segments and enhance its own R&D capability.

Hero MotoCorp, however, maintained that the closure of EBR would not impact its R&D and future product line up.

"Hero MotoCorp, with strong in-house R&D capabilities, remains confident that its future product line-up would not be affected despite EBR ceasing operations," the company said.

"The company's Centre for Global Innovation, Research & Design, coming up at Kukas on the outskirts of Jaipur in Rajasthan, is expected to commence operations in financial year 2015-16. It will have around 600 engineers from India and around the world", it added.

Erik Buell Racing was founded by former Harley-Davidson engineer Erik Buell in 2009 after the shutdown of his previous company Buell Motorcycle Company, by parent company and majority stakeholder Harley-Davidson. EBR was best known for making race motorcycles, and the most recent one, the EBR 1190RX started off with impressive performance, and won all four races in its debut at National BEARS class at the Pirelli Road Race Series on Australia’s Phillip Island last year.

EBR also developed a naked street version of that superbike, the 1190SX. But as much success on the racing circuit, EBR bikes failed to ring in the sales registers, despite dealers offering significant discounts.

So, was the Hero-EBR partnership doomed from the start?

Naysayers may say so. But it was a promising opportunity for Hero to tie up with EBR after the split with Hero. What EBR offered Hero was access to technology to make high-performance motorcycles, a stake and playing field in the World Superbike Championship, but even more pertinently, a network in the US and Europe – a foothold of sorts to market and sell Hero products.

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Under the partnership with EBR, Hero was reportedly developing several motorcycles for the Indian market, including the much-awaited Hero HX250R.

EBR engineers were also said to have tuned the recent iterations of Hero’s flagship motorcycles – the Karizma and the Xtreme. These new variants, however, have found little favour among motorcycle enthusiasts and even former owners.

But EBR is not the sole technology partner or sole access to high-performance technology for Hero. The company’s upcoming R&D center in Rajasthan will house over 600 engineers from India and around the world. Last year, Hero roped in Markus Braunsperger from BMW as Chief Technology Officer. And for engine design and development, there is Markus Feichtner from Austrian engine maker AVL.

With EBR now shutting shop, Hero is expected to inherit some technology and under-development products like the HX250R. It however, remains to be seen, when and if Hero will launch any of those products.