India’s largest two-wheeler manufactuer, Hero MotoCorp (HMCL), has started producing the 110cc Dash scooter model at its facility in Gurgaon, three sources associated with the development told Autocar Professional.
According to the specifications revealed by the company last year at the 2014 Auto Expo where the Dash scooter was first unveiled, the upcoming model will be powered by a new four-stroke, force-air-cooled, single-cylinder, 111cc petrol engine, which will generate a maximum power output of 8.5bhp.
Meanwhile, in close comparison to this, Honda Motorcycle & Scooter India’s best-selling model, the 109.2cc Activa, against which Hero will position the Dash, generates a maximum power output of 8bhp.
Hero is taking the competition further by pitching in the Dash with several new features (as expected) that were never offered on the models in this segment for years. These would include telescopic front forks, rear monoshock, convenient tail-mounted fuel lid, side-stand indicator, service due indicator, USB mobile charger, key with e-code, boot light, LED tail-light, dual tone mirrors and others in the 110cc scooter segment against Honda.
According to a source, who requested anonymity, HMCL was initially rolling out close to 1,400 units of Maestro scooters per day from its Gurgaon plant last year. “The production of the Maestro was later stopped to make way for producing the first batch of the new Dash model,” he said.
“The company has been performing final road tests on the Dash model, and is now aiming to build a sizable inventory of 30,000-35,000 units before it commercially launches the same in the market. This is expected to happen very soon now. On the other hand, the Maestro continues to garner sales of close to 45,000 units per month,” disclosed another source.
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Going forward, it seems that Hero will have two 110cc scooter models (Maestro and Dash) to gain traction in this sub-segment against the market leader – the Honda Activa.
It is to be noted that the Maestro is one of the three production models (other two being Passion XPro and Ignitor motorcycles) on which Hero pays royalty to Honda. Lately, this has been extended until June 2017. “As per the extended royalty agreement with Honda, Hero will pay royalty to Honda till June 2017 or as long as they continue to manufacture the Passion XPro, Maestro and Ignitor, whichever is earlier,” clarified another source aware of the terms between the two companies.
“Hero will obviously look at phasing out the production of Maestro scooter model in the near future. However, they will wait for the Dash model to gain some traction in the market. Secondly, the presence of Maestro, a known name now, will continue to benefit them in terms of sales every month,” he added.
Clearly, Hero MotoCorp’s priority is to push its scooter sales and grow closer to Honda’s ever-growing scooter sales. However, marred by the scooter production capacity constraints, Hero has been limping on the front of its product supply in the market for months now.
The Gurgaon and the Dharuhera plants were the only two facilities which were rolling out the Maestro and Pleasure models, until the company began production at its Neemrana plant (capacity: 750,000 per year) in October 2014. However, the production at Neemrana saw bikes rolling out first. Hero’s total scooter production capacity was limited at 75,000 units per month. This was later (October 2014- January / February 2015) pushed to nearly 80,000 units per month. Sources have added that the Neemrana facility is now rolling out scooters too.
While the scooter capacity expansion program is undergoing on a priority at Neemrana and at Gurgaon, the company is reportedly aiming for 100,000 units per month, followed by 125,000 units and 150,000 units per month by June-August 2015. Sources say that this augmentation of scooter capacity will also include additions of the new assembly lines coming up at the Halol plant in Gujarat.
“Hero began constructing its Halol plant early last year and was following a deadline of 15 months. The plant can be expected to go on stream later in 2015, which will further add on to the existing scooter capacity,” highlighted an official associated with the development.
Additionally, as soon as Hero’s Gujarat plant, which will have a production capacity of 1.2 million units per year under phase 1 and 1.8 million under phase 2, reaches full capacity utilisation of 1.2 million units per year, the company will shift its focus on building the sixth plant at the chosen site in Andhra Pradesh.
While Hero’s big scooter plans are taking some time to shape up, the scooter segment as a whole has grown by 26.59 percent YoY on a cumulative basis between April 2014-February 2015, as against a slow YoY cumulative growth of 3.24 percent for motorcycles and step-throughs during the same period.