After ruling the roost in the Indian market for decades together in association with Honda, Hero Group, or Hero MotoCorp, is preparing hard to go it alone. The company thus far was entirely dependent on Honda for the technical knowhow on its products. However, the Japanese bike maker will cease to provide any further technical assistance to Hero after the two companies’ agreement officially ends, and Hero Honda’a transition into Hero MotoCorp is completed.
In a bid to become self reliant as regards technology and design, the Hero group is already on a hunt for the best experts. The company is vigorously looking at roping in foreign technical and design expertise to be able to design and develop polished and reliable two-wheelers in-house.
It’s somewhat on the lines of Mahindra taking over Engines Engineering for all their technical needs for their two wheeler business. Hero group may not buy out such a design and engineering firm, but would hire it full time for consultancy for sure.
“Technology acquisition is a long-term process and we are exploring all avenues, including tie-ups and contracts with foreign specialist firms for engines, transmissions and design capabilities,” Ravi Sud, CFO, Hero Group, told The Telegraph.
Companies such as Recardo in the UK and AVL from Austria are specialists in engines, while the design houses could be from Europe or Japan, Mr. Sud indicated, without being specific about whether the company is in talks with any of the aforementioned firms.
Apart from hunting for foreign experts in the field, the company is already on a vigorous drive to hire engineering and product development experts from domestic talent pool.
In the meantime, Hero will continue paying Honda royalty for every product supplied by Honda till 2014. Hero Group will also pay a royalty fee of Rs 2,480 crore to Honda till the association of the two companies officially ends in 2014.