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Saturday, 31 March 2012

Hero Motocorp’s Plans For Future


The company has recently tied up with a few International Automotive companies for technological expertise that would be adapted in the Hero MotoCorp products. We’d earlier mentioned that the company is also planning to come up with high displacement bikes which might be as high as 1000cc ones in the near future.
The company is also planning to think beyond the two wheeler market, the way Bajaj Auto is operating. They’re already in the three – wheeler segment and with the coming up of RE60, they’ve forayed into the passenger car segment as well. Though, HMC has plans like this, we don’t really know what is the segment is tries to get into hands dusted upon with. This new segment will help the company in meeting a target of $10 billion turnover over a span of next 5 to 6 years.
When he was asked about the company’s tie up with Erik Buell Racing (EBR) Mr Pawan Munjal, MD & CEO of Hero MotoCorpseemed to be planning to make use of the company to come up with a bike in the 200cc segment for the Indian market. He said, “Though EBR does high-end bikes and has technology for high-performance, racing bikes, this can be adapted for mid-segment bikes beyond 200 cc. I feel they have lots of new ideas, I think I can talk to them about even 100 cc engines over time.”
The company would launch bikes which incorporates EBR’s technology by the next fiscal year. HMC is licensed to make use of Honda’s technology till 2014 and so these products would be blended with Honda’s engine technology for the first few years and then would completely shift to EBR’s technology. Mr. Munjal said, “We’re also working on completely new platforms with EBR, which would be launched by 2013-14.”
The company is also looking forward to get into tie ups with few other companies that would help Hero MotoCorp  to become superior when it comes to the technological front. He said, “We will not restrict ourselves to a single technology/ arrangement, but have multiple tie-ups with experts. To my mind, 3-4 (tie-ups) is a good number.”
The company wants external aid only when it comes to technological aspects and the engines that would be made use of in the HMC bikes. It feels that it is self – reliant when it comes to the design front. It feels it can sustain on the long run with it’s in – house team which has been working on the design concepts of Hero products.
Regarding this, he said, “With EBR we’re finding everything for a certain segment of bikes, with somebody else (AVL, Ricardo) we’re working on only engines. For styling, we have a fair amount of expertise within, yet we will be bringing in more resources. We will hire expats, since our customer is global; we will have to become a multinational as well.”
The company has started working on the 100 – 125cc engines as of now. We’d always been quoting the news that HMC is all set to launch low cost bikes in the price band of INR  30,000 – 40,000.
When he was asked on what other segments would the company foray into in the near future. He said, “There definitely is a vision to do that, but right now we’re focussing our energies on two-wheelers. There is a plan to diversify into other segments, maybe cars or commercial vehicles — though that’s a more mid and long-term strategy.”
Mr. Munjal is also trying hard to improve the relationship with the company.  He says, “I would think suppliers are very important. Going forward there would be synergies in various areas, which if they desire and works out well for both companies and the suppliers, there can be some arrangements.”
HMC, as many of us know is also eyeing to buy the Italian bike maker – Ducati. The company is trying to get the required financial aid to go ahead with clinching this deal. Regarding this issue, he said, “There are a few bankers who have been meeting two-wheeler makers like us for Ducati. Many people these days are approaching us since they know we’re in the market looking for tie-ups. We’re open to meeting as many people as is needed. There’s no situation where we’re in an advanced state of discussion with any one manufacturer or a banker. I can’t really say if we’re interested in the company or not.”
The company is on the process of getting itself re – branded as Hero MotoCorp from its earlier name of Hero Honda. We’re in fact so much used to the name Hero MotoCorp that Hero Honda sounds a little odd to me at this point of time. Mr. Munjal expects that the entire re – branding exercise would take another 6 months to one year’s time. He added, “The export markets are very important to us now, but we can’t produce two sets of products. They are little different from India, so the brand push needs new thinking. We want the brand change to be smooth.”
Source : Business Line

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