Hero and Honda slug it out in R&D

A little more than a year after their joint venture was terminated, Hero MotoCorp and Honda Motorcycle and Scooter India (HMSI) are going all out to strengthen research and development (R&D) capabilities for expanding operations in the Indian market.

While the Munjals-promoted Hero MotoCorp today formally announced its third technological tie-up with Italian two-wheeler design firm Engines Engineering, Honda Motor Corporation is setting up a technology centre at its Manesar facility to introduce products faster and at competitive price points in the domestic market.

Set up in 1979, Engines Engineering is an end-to-end motorcycle designer with expertise in conception, design and styling and on-line assembly.

HMSI is developing in-house capabilities to launch India-specific products in the country. Yadvinder Singh Guleria, operating head (sales & marketing), HMSI, said, “Honda R&D India will move to an integrated set-up in the Manesar unit. The centre is expected to become operational by November. The R&D team would look at how to reduce the cost of manufacturing products without compromising on quality, and also work on introducing products faster in the Indian market.”

Meanwhile, Hero MotoCorp has announced an investment of Rs 400 crore on an R&D facility near Jaipur. Early this year, the company had signed agreements with performance bike manufacturer Erik Buell Racing (EBR) and Austrian engine developer AVL. “Our aim is to have our partners as an extended R&D arm for Hero MotoCorp. These partners have huge specifications available and eventually, we want to be known as a full-fledged global two-wheeler brand,” said Pawan Munjal, managing director and chief executive officer, Hero MotoCorp.

With the three alliances, Munjal said the company would eventually replace all new products sourced from Honda between this year and 2014. While Hero MotoCorp is working on engine technology with AVL, it would source technology for meeting new emission norms, scheduled to come into effect in 2015, from Engines Engineering.

The company has already identified three models to be replaced in the first phase. “We are already working on a motorcycle to replace the 150-cc bike Impulse, which we sourced from Honda. The others include the Maestro scooter and the 125-cc Ignitor. All new products we get from them till 2014 would be substituted with products we develop in alliance with our technology partners,” Munjal said.

The company is set to complete the process of brand migration of its models from the erstwhile joint brand to the ‘Hero’ brand by the end of this month. It is also increasing the production capacity of scooters 50 per cent to 60,000 units a month. This is primarily due to demand for the newly launched Maestro. Also, the production capacity of 125-cc motorcycles is being increased 25 per cent to 75,000 units a month, owing to robust demand for the Ignitor.