Hero MotoCorp inks technology with EBR

The development is a part of the Indian firm's strategy to enhance technological prowess, post the break up of the erstwhile joint venture with Honda-Hero Honda.

"We are entering into a strategic partnership with Erik Buell Racing (EBR), which currently is more into high end and high performance racing bikes as we are completely missing in this category of motorcycles," Hero MotoCorp Ltd Managing Director and Chief Executive Officer Pawan Munjal told media persons.

He said the partnership is not a joint venture but is "a long-term arrangement".

While EBR is more into high end, Munjal said it is also possible that the US firm's technology can also be used for smaller engine bikes.

Asked by when Hero MotoCorp Ltd (HMCL) could launch a product using EBR technology in the market, he said: "We have already started work on some of our existing products and also on completely new product. I would tend to say that by calendar 2013 (a product will be launched)."

He, however, said that the company will not straightaway launch a 1,000 cc or a 1,200 cc bike using the EBR technology but would move up gradually.

The product will cater to global markets and the two partners have not yet finalised if HMCL would be restricted to enter markets where EBR is present or not, Munjal added.

"Those are things we will address as we go forward but in terms of market we are not restricting ourselves," he said.

Munjal said the idea behind entering into partnership with EBR is a part of HMCL's overall strategy to have multiple technology source for different segments and enhance its own R&D capability.

"As stated in the past that we will not replace the current technology (Honda's) with just one technology source or technology company or partnership but we are looking at multiple technology tie ups to go for specialised technologies wherever available," he said.

"Ultimately the idea is to build our own R&D capabilities to match the best in the world," Munjal added.

In December 2010, the Hero Group and Honda had agreed to end their 26-year-old relationship, with the Indian partner agreeing to buy out Honda's 26 per cent stake in Hero Honda for Rs 3,841.83 crore.

The two partners had, however, signed a new licensing agreement under which Hero will pay Honda 45 billion yen (about Rs 2,450 crore) till 2014.

Munjal said HCML is already in discussions with other firms for sourcing of technology for commuter bikes to replace the Honda technology.

"The work is already on...It could happen even before that (2014) and we don't have to wait for the end of the deadline," he said.

Through its association with EBR, Hero MotoCorp will also foray into the international motorcycle racing by sponsoring two teams.

The domestic two-wheeler major will present 'Team Hero' and 'Amsoil Hero' at the AMA Pro Racing National Guard Superbikes Championship. Racers Danny Eslick and Geoff May will ride EBR 1190RS bikes at tournament.

"We would also like to get involved with racing in India. We would like to bring in the best world racing into India," Munjal said.

Commenting on the association, EBR Chairman and CTO Erik F Buell said: "We are delighted with this partnership. We look forward to designing technology solutions, which are in line with contemporary global standards and also futuristic in their appeal and utility".

On the branding front, Munjal said for domestic market, it will be sold as Hero products, while the international aspect has not been decided yet.

Commenting on production plans, Munjal said: "We are going to manufacture high-end engines in India. For overseas nations, if the markets demand and require, we could manufacture there as well."

For India, he said production details will be decided by operations team, "but as these will be new products, so in all likelihood, these may be rolled out from a new location".

Both the company are currently working on the hybrid scooter Leap, which was showcased at Auto Expo, but declined to share whether this will be the first joint product.

EBR has a capacity to produce 15,000 units a year.