Hero MotoCorp ready to fit own-developed engines

From next year, in three sizes on some of its two-wheelers, for now

A little over two years since Hero MotoCorp parted ways with Honda Motor Company of Japan, the country’s largest two-wheeler manufacturer is set to introduce independently developed engines in new products, starting 2014.

Anil Dua, senior vice-president (marketing and sales), said: “We have successfully tested three engines. These will be introduced in some of our products next year.”

He declined to share details about the segments but said these would gradually be installed across most products in its range. Hero has developed new engines of 100cc, 110cc and 250cc capacity with technical partners. Prior to the termination of the joint venture, Honda supplies technology for products which Hero marketed in India.

Apart from the new engines, Hero is set to commercially launch its first motorcycle without the technology of its erstwhile partner, in 2014. The Hero Group and Honda had agreed to end their 26-year-old joint venture, Hero Honda, with the Indian partner agreeing to buy out Honda’s 26 per cent stake in the company for Rs 3,842 crore, in December 2010.

“It has just been over two years since we commenced our solo journey. In this short span, we have made significant upgradation of our existing line, incorporating next-generation technology and features. This is a reiteration of our capability to develop indigenous technologies,” Pawan Munjal, chief executive officer and managing director, said last week. The company unveiled 15 new products on October 10, to hit the market during the next six months. These include a refreshed top-end  KarizmaR motorcycle, the ZMR, Splendor I-Smart and a new variant of the Pleasure scooter. Munjal isaid when Hero announced its new identity in 2011, it had promised 50 new products in three years. “So, there are 35 more to come,” he said.

Sources in Hero MotoCorp told Business Standard the company has rights to use the new products sourced from Honda till 2017 but the target is to have on road its own range of two-wheelers by 2016. While Hero’s research and development team has been mandated to evaluate consumer requirements in the home market, technical tie-ups have also been forged with Italian design firm Engines Engineering, US-based performance bike manufacturer Erik Buell Racing and Austrian engine developer AVL.

“Our ultimate aim is to have our partners as an extended R&D arm for Hero MotoCorp. These partners have huge specifications available and we want to be known as a full-fledged global two-wheeler brand eventually,” Munjal has said. The company is investing Rs 450 crore to set up a R&D centre near Jaipur in Rajasthan. The facility would be commissioned in the first quarter of 2015.

Separately sharing insights on consumer sentiments in the domestic two-wheeler market, Dua said that the company expected sales to be strong in the festive season. “Hero is approaching the festive season with a lot of optimism. Based on our retail sales, the new offering we are introducing in the market, this should be a record season for us. Last year, we retailed 1.1 million units in October and November. This year should be better.”

Volumes at Hero MotoCorp have grown by 0.58% to 2.91 million units in the first six months of this fiscal. Sales of two-wheelers in the domestic market have increased by 3.51% to 7.01 million units in the same period.