Hero MotoCorp has inaugurated its R&D centre near Jaipur. The company is betting big on this centre for innovation and technology to help develop and expand its portfolio. In an interview to Bloomberg TV, Hero MotoCorp Chairman and CEO Pawan Munjal makes his intent clear of heading into the premium 250CC bike segment. Hero is also open to inorganic growth if it finds the right opportunity, right kind of partner with the right type of competence abilities, he said.

Amidst a slowdown in the global economy, Hero appears to have stepped up the gear. Is it a new strategy?

We have clearly shown intent and the direction the company is heading into at the Auto Expo. Also, the first two Hero indigenously designed products launched last year in September and October — the two new scooters — both doing extremely well and are very successful. We showcased the new Splendor ISmart 110, which is a completely brand new engine, a brand new frame and a completely new motorcycle. Then we have also shown some concepts and prototypes in the premium segment. Clearly, that is the direction we are heading to while strengthening our current range and keeping it fresh all the time for the volumes that we need.

Does the new R&D centre negate any possibility that you will be getting in a foreign R&D partner or any new venture that you can expect?

The amount of stuff that needs to be done at Hero to keeps its range going, to keep increasing its volume, going into new markets and new segments, we need a lot of projects and lots of stuff to be done. So we are open and I am always looking out for inorganic growth. If we can find the right opportunity, right kind of partner with the right type of competence abilities, we are open to inorganic growth as well.

What type of investment has gone into the R&D centre and what type of impact are you expecting to help your brand and portfolio?

In this R&D centre, the investment has been to the tune of ₹850 crore. These are world class tracks build especially with very intricate designing.

We have a consortium of three different companies from Italy and Spain, which helped put together the designs and concept for this centre and investment that has gone into all these special facilities, eco-friendly buildings that we are now building all the time.

The kind of facilities and freedom that we’re giving to engineers to innovate, think and design, software, the equipment and the capital goods are absolutely world class and all in one centre in one place. It is the best part. You do not have to run around to go to different places to acquire stuff, to test the products and components. This will help us do much more than we were doing earlier from our R&D centre.

The speed with which we will be able to come up with new models will be better.

The number of new models that we will be able to come up will be much more. So that’s all we are trying to do.

With your venture into 200-250 CC premium bike segment, it is now quite evident that Hero is trying to enter the competition. But given the global slowdown, what’s the demand outlook for the premium segment looking like?

Surely, we have a small market share in the premium segment. As I have said earlier, we have shown our intent and direction of heading into the premium segment. And I have also said that we are doing a lot of work on those products.

Sooner than later, you will be seeing those products coming out of Hero stable not just for the Indian market but also for the global market.

That will help in increasing our market share here in the country and along with that we are looking for expanding our range segment within segment.

Two-wheeler sales are picking up. How is the Budget going to help sustain the demand growth, especially in rural India?

Personally, I think the amount of focus the Budget has put on the rural sector, is very encouraging. I am sure it will help revive the rural sector.

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