'Hero MotoCorp will be attractive for any engineer on this planet as an R&D facility.’
Dr Markus Braunsperger, Chief Technology Officer of Hero MotoCorp, on developing engineering and R&D capabilities and revving up for the global mid-sized motorcycle market. An interview by Sumantra B Barooah.
Dr Markus Braunsperger, Chief Technology Officer of Hero MotoCorp, on developing engineering and R&D capabilities and revving up for the global midsized motorcycle market. An interview by Sumantra B Barooah.
Broadly, what is the direction Hero MotoCorp is looking at in terms of engineering?
The philosophy is to remain a highly successful company. First of all, we will strengthen the categories we operate in, which mainly includes the 100cc to 125cc class. Secondly, we are looking at gaining market share in the premium commuter category of 150cc and above motorcycles. Thirdly, we plan to look at the category of motorcycles with engine displacement of more than 250cc, which will give us an opportunity gradually in India but mainly in the global markets.
So for Hero MotoCorp, global markets will play a key role for its products beyond 250cc?
Definitely because if you look at the market for 250cc-300cc and above motorcycles, over 95 percent are sold in global markets, not in India. That said, this segment is growing in India and I see that this will gain more traction in the coming years.
Where do you see the cut-off in terms of the higher-end motorcycles?
If we do it the right way, and if we do have the patience to keep it growing the right way, then there is no limit. This will take time as you cannot expect a business sense to come out for a 1000cc supersports bike for Hero in India. We have to expand the brands for the customers, who need to follow this journey. This is the reason why we came up with the styling design concept – the XF3R – because we wanted to display our future styling design language. This is a tricky thing because on one side the Splendor customer has to see this as an aspiration even if he cannot afford it, and for those who can afford this need to be proud to see this (XF3R) as a product from Hero in terms of the product, competitiveness, and status with reference to the competition.
So this is something that we have to explore not to disconnect our commuter customers and to have the premium customer feel proud of what he is sitting on at the same time.
Has Hero reached a level where it is at par with Honda in terms of engineering capabilities or is there still some gap?
Honda, engineering-wise, in the two-wheeler industry, is one of the best companies. The others are also very good. And Honda, as well as the others, who have a history and a legacy in big bikes, their engineering competencies just tell us a great story. But gradually, I am quite confident, we are revving up our engineering capabilities and as a business we do need to rev it up faster than anyone so far.
So the learning curve for Hero MotoCorp would be much sharper, won't it?
It has to be. The good thing is that we have already started proving that we are heading in the right direction. The two scooters that we launched last year – Maestro Edge and Duet – were completely developed in-house and within six months helped us gain market share from 14 percent to 21 percent now in the overall scooter market. This is a success story. It’s not the advertisement that sells, it’s not the celebrity that sells, it’s the product that sells.
Will Hero MotoCorp’s relationships with various sources for inputs on engineering and design continue to exist or will it go solo once it becomes strong in the necessary areas?
The decision with EBR was not taken by us, and we are facing the situation. I am fully convinced that whatever we do on a product level, we will have to control it in lieu of our leadership role, our competencies and not the opposite where the other company we align with tells us how to do and what to do. We are in a clear reverse mode right now. When it comes to limits in terms of competencies and resources, all automotive companies run into a resource crunch where they cannot ramp up or keep up with the pace of the moving industry.
Selectively, we will have engineering partners based on their capabilities, capacities and specialisation. In the meanwhile, we will also build up our capabilities where we can come up from a clean sheet to mass production with a completely new vehicle and new platform. To get a bike into mass production is not just about the R&D capability, it is also about the capability of our suppliers, our in-house manufacturing and how we collaborate. So looking into the commuter / deluxe segment with the Splendor iSmart 110, we are confident that we are already at that level.
Looking beyond 150cc, we are really looking into the supplier capabilities, R&D capabilities as well as manufacturing capabilities.
Which are the new propulsion technologies that the company is looking at seriously?
We are becoming more convinced that as a business strategy it is better to under-promise and to over- deliver than giving surprises.
Secondly, we do have to explore technologies and we have to make ourselves capable to assess and work under different technologies. Having said that, we are not a research company but a company that has to bring a product to mass production. We don’t want to be a company which showcases concepts or technologies that it will not be able to sell in India due to outrageous prices or failure to meet the requirements of the Indian customer.
We need to look at what the customers actually require and what are they looking for, and based on that we must work on the right technologies.
In the context of your background, how do you see the Indian two-wheeler industry?
The two-wheeler industry in India has its own rules, requirements and changes. From an engineering perspective, what is quite fascinating is, for instance, the Splendor class of bikes have sold more than one million units here. On the contrary, from where I come, this class of bikes have sold may be slightly above 100,000 units. So we talk about volumes where we do a bike every 17 seconds, which means every 17 seconds we are ready with a new vehicle.
The engineering challenge at this point is that the design and manufacturing are not just a theory you hear in a college. We have to look at the engineering requirements of how to really assemble a vehicle in 17 or 20 seconds, and that’s how it is different. How do we develop our ecosystem within the boundaries of requirements that are given, how we enhance our capabilities and be successful in the segments where we are not present currently are a set of engineering challenges for which we do have to find smart solutions. It’s not a high-end technical solution that meets the purpose here. High-end technical solutions are expensive too, so smart means to find a right technical solution in an acceptable cost bracket.
Ten years down the line, what is your vision for Hero MotoCorp in terms of engineering and R&D perspective?
We have the complete capability to operate in the segments that I was talking about. We have proven our capabilities through products that are highly successful in the market. We should be attractive for any engineer on this planet as an R&D facility.
Is the Splendor iSmart 110 a fully in-house developed motorcycle? Does it have anything common with the previous Splendor variants?
Yes, it is a fully in-house developed product. The engine, chassis, body and other components – all are completely new. There is nothing common with the earlier Splendors.
While the Maestro Edge and Duet scooter models, which were launched last year, were completely in-house developed scooters, the Splendor iSmart 110 is a completely in-house developed motorcycle. The brand name continues, and looking at it, it’s clearly a Splendor in terms of styling, although it is more modern now. We are very convinced that this is absolutely the right move to remain in the market leadership position in this segment.
Like Bajaj Auto’s Pulsar brand, which has established a good connect with young buyers over a decade, what is Hero MotoCorp doing to build up that pull in this category?
First of all, you need to introduce the right product(s). Without that, you will not see any success. Only good products sell and that is why we are concentrating on product by product. What is for sure and is Hero MotoCorp’s strength is that we understand the Indian customer like no one else. With this capability and the right engineering competencies, we are confident about our upcoming products.
(This interview has been published in Autocar Professional's Two-Wheeler Industry Special (March 1, 2016) print edition)
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