South Korean bikemaker Hyosung has split with Garware Motors and has entered into a partnership with cash-rich real-estate magnate, DSK Group. Hyosung’s new partner is already operating in the automotive business with Toyota dealerships, and now aims at making it big in the ever-growing Indian two-wheeler market.
DSK’s new business endeavour will be branded under a new entity, called DSK Motowheels, which is a technical alliance between DSK and S&T Motors. Under the new setup, DSK can assemble, manufacture and retail Hyosung bikes in India under a new brand name, DSK Hyosung. The new acquisition will also allow DSK to take charge of Hyosung’s existing dealerships, manpower and the original bike assembly plant at Wai. However, the ownership of the second, 25 acre plant at Wai would remain with Garware Motors.
Though DSK is tight-lipped about the investments it has made in buying out the Hyosung brand from Garware, we estimate it to be around Rs 80 to 100 crores. However, the company confirms to make further investments to the tune of Rs 300 crore from March 2013 onwards in setting up another plant, preferably in Maharashtra and establishing new dealerships. Bullish about the growth, DSK also plans to raise the engine assembling facility and an India-specific R&D centre at the proposed plant.
The firm has begun scouting for locations and component manufacturers. Ambitious plans include building a new plant within 18 to 24 months and gradually achieve 90 percent localisation of Hyosung bikes starting from their latest offering, the GT250R and upwards to bigger bikes. Keeping the dealership expansion plan in order, DSK Motowheels will expand its pan-India network from its existing 18 dealers to 35 by March 2013.
DSK Motowheels becomes Hyosung’s third partner in India after Kinetic and Garware.