After having a dream run of sorts, Indian bike maker Hero and popular Japanese two wheeler manufacturer Honda decided to part ways sometime back. The much publicized split saw the Indian partner getting to use Honda bike platforms and technology for a few years as alimony. The Impulse became the first motorcycle to roll out of the Hero Motocorp stable after the break up with Honda. It’s a little known fact in the country that the Impulse is actually heavily based on the Honda NXR150 Bros. Hero also came up with Maestro automatic scooter and the Ignitor executive commuter bike earlier this year. While the Maestro is essentially a Honda Activa in a stylish set of clothes, the Ignitor is almost a Honda Stunner but with a slightly different front fairing.
Now, it has emerged that Hero Motocorp might discontinue selling the above bikes to prevent paying royalty to Honda Motor Corporation, Japan. Hero Motocorp has also signed an agreement with a new European technology partner whose name hasn’t been yet announced by the bike maker. However, the company did say that its new partner is an expert in Internal Combustion engines, hybrid and electric vehicle.
Pawan Munjal, MD & CEO of Hero Motocorp said “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 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. ”
Hero MotoCorp plans to come up with is integrated R&D facility before June 2014, i.e., before its technological agreement with Honda expires. The 250 acre R&D facility will be established near Jaipur and will cost Hero about Rs. 400 crores. The bike maker has already bought a minority stake in Erik Buell Racing (EBR) and has entered into a technology agreement with AVL, Austria.
It may be noted that Hero has no plans of discontinuing its high selling Splendor and Passion commuter bikes as the royalty payout on these vehicles will end in 2014.
Am not sure how the royalty agreement works but I would assume that it would probably be per vehicle sold. In which case, HH isn't paying much & Honda isn't gaining much from the Impulse, Ignitor & Masetro. They probably aren't selling anyways.
And if its a fixed royalty no matter how many you sell, HH may be paying far more than what it gets by the way of sales of these.
Either way, it doesn't make sense for HH to invest any time/money. But then its left with an amazingly stone age portfolio of products and wonder if they will really have something in store in 2014 as planned. Sadly, I see HH fading away soon pretty much like TVS unless they surprise all of us.
It is not just the engine that they share. . . .
It is not just the engine that they share. . . .
well not payin royalty does make sense but if I am not wrong they do not have to pay royalty to Honda for the engines which they have been using for really long.. And if I am a not wrong the stunner's engine is exactly the same as the one in super splendor albeit with a less amount of power..
I do not know whether this engines qualifies for the no royalty part or no but if it does, they do not have to phase out Ignitor and if it does they have to phase out the super splendor as well.. Same goes for the Impulse, again this if I am not wrong might have the same engine as unicorn which Hero has been using since many years in the Hunk n Extreme..
well not payin royalty does make sense but if I am not wrong they do not have to pay royalty to Honda for the engines which they have been using for really long.. And if I am a not wrong the stunner's engine is exactly the same as the one in super splendor albeit with a less amount of power..
I do not know whether this engines qualifies for the no royalty part or no but if it does, they do not have to phase out Ignitor and if it does they have to phase out the super splendor as well.. Same goes for the Impulse, again this if I am not wrong might have the same engine as unicorn which Hero has been using since many years in the Hunk n Extreme..