Hero MotoCorp, Engines Engineering form alliance

Hero MotoCorp has struck a global partnership with Italy’s Engines Engineering to enhance its in-house technological and designing capabilities. Engines Engineering will partner Hero MotoCorp for the OEM’s next-generation product line-up. The Bologna-based firm will provide technological know-how in terms of designing for the future products to be launched by Hero MotoCorp. Engines Engineering, a 33-year old company, is a leading ‘end-to-end’ motorcycle design firm offering services ranging from the conception and design stage to styling, on line assembly, and marketing. The company earlier had an association with Mahindra 2-Wheelers, after it was acquired by Mahindra & Mahindra. M&M had picked up a 70 percent stake in Engines Engineering over three years ago. It rolled back its stake to the Italian company’s promoter Alberto Strazzari earlier this year.

According to PawanMunjal, MD, Hero MotoCorp, the alliance is "a long-term partnership and there is immense scope" to expand the alliance. This latest step is in line with the company’s vision of having multiple centres of excellence located strategically across the globe.

Hero MotoCorp already has a partnership with US-based Erik Buell Racing (EBR) for technological know-how and another with Austrian engine maker AVL to build its internal capabilities for engine development. It will also set up a new R&D centre at Kukas, Rajasthan with an investment of Rs 400 crore. The Centre will be operational by Q2 of FY ’14.

The Indian OEM is on an aggressive drive to build a range of products to replace its existing ones which were developed in association with its former joint venture partner Honda.

A strong engineering foundation will be crucial for Hero MotoCorp to compete against the crop of models from its peers. The other Indian players are also ramping up their R&D capabilities in different ways. While Bajaj Auto benefits from Austrian bike maker KTM, where it is a part owner, TVS Motor is in talks with BMW Motorrad for a possible engineering alliance.

As the two-wheeler market matures in India, the OEMs will also have to offer more exciting products to the consumers. New products may also help them face weak market periods better.

The two-wheeler market in India is witnessing a slowdown currently. Leader Hero MotoCorp’s sales volume in August fell 12 percent YoY to 443,801 units in August.

The company’s new 110cc scooter Maestro has helped it clock sales of 45,000 scooters (including Pleasure) last month. Hero MotoCorp says it will now scale up its scooter production to over 60,000 units a month. That is 50 percent more than a year back. The company is also investing in augmenting capacity of its 125cc products (Ignitor, Super Splendor, Glamour and Glamour FI). The overall production capacity of 125cc models has been ramped up to over 75,000 units a month, up from about 60,000 units about a year back.