The world’s largest motorcycle and two wheelers manufacturer Hero Group (India) had recently announced a disassociation with Honda’s joint venture Hero Honda in India. Shortly after the announcement was made, the same launched two new products under Hero MotoCorp brand name in London. The products were an enduro motorcycle named Hero Impulse and an automatic scooter named Hero Maestro. Recently the company also launched Hero Ignitor, a rebranded Honda CB Stunner.
Although the disassociation has taken place but not on the technical level. Hero Group and Honda are still in a technical agreement till 2014 under which Honda will supply engines and transmissions to Hero for the next two years. So obviously all the Hero models that I just mentioned in the above paragraph, equip Honda engines and therefore the manufacturer is paying royalty to Honda in spite of the disassociation. To avoid paying the hefty royalty Hero is planning to discontinue these newly launched models- Hero Impulse, Hero Ignitor and Hero Maestro.
As per the latest news, Hero MotoCorp was looking for a technology partner lately and it has signed an agreement with a European firm that will provide technical assistance to Hero for its new products. The name of the European technology partner has not been announced yet, though the company did say that its new partner is an expert in internal combustion engines, electric and hybrid vehicles.
Pawan Munjal, MD of Hero MotoCorp said the company needs an independent R&D set-up, and for that matter it has been looking for new partners since its split from Honda. He also stated,
“We are already working with our alliance partners for a new on/off bike. This could be similar to or much better than Impulse. All models before Impulse will stay. Royalty payouts for them will end in 2014. The new partner that we have tied up with will help us in aligning to new emission norms that come in from 2015.”
“With AVL, we will work on engines, while EBR (Erik Buell Racing) will be used for developing certain kinds of bikes and other products like hybrid scooter. We are just getting to know each other and seeing what we can get from these companies. As we move along, we may purchase a stake in them, beginning with a minority stake. Ultimately, the idea is to have them as an extended arm of our R&D set-up at Jaipur. ” he added.