The Hero Group has poached 150 engineers from rivals, including Mahindra Two-Wheelers, Yamaha and Bajaj Auto, boosting its flagship Hero Honda‘s research & development (R&D) functions, after its 27-year old two-wheeler joint venture partner Honda parted ways, raising concerns over long-term technological support.

The Munjals-controlled company plans to deploy its R&D executives under different verticals such as regulations, design, technology and engine to bring in greater focus to the growing talent pool, according to two senior industry officials familiar with the development. While TM Bala Raman has recently joined from Bajaj Auto as technical advisor, LS Kurien has joined from testing agency Centre for Automotive Technology. Arun Kejriwal switched over from Yamaha Motors. Others such as Amit Lingwall, Rajvir Singh, Abhinav Tyagi are among the mid-level and junior engineers who have quit rival firms to join India’s largest two-wheeler firm.

Harjeet Singh will continue to head the R&D operations, said people familiar with the matter. Hero Honda spokesperson declined to comment. “We are fast enhancing our own R&D capabilities in terms of both manpower and logistics.” Hero Honda managing director Pawan Kumar Munjal had said.

New Delhi-based group’s move to beef up its R&D operations is part of a larger plan to usher in product makeover as it plans to ramp up exports after the disengagement with the Japanese partner. Senior officials from the group are talking to design houses in Europe, to assist in styling and design. The Mahindra Group acquired Italian design house Engines Engineering to bolster two-wheeler designing.

Though the Hero Group will get technological support from Honda till 2014, it needs to get a grip on two-wheeler engine technology, said automobile industry experts. “The Hero Group will be able to sustain the growth momentum till 2014. However in the intervening period the group will have to think of new products and designs or the future looks hazy.” said Abdul Majeed , auto practice leader at consulting firm PWC.

Auto analysts tracking the two-wheeler sector said both the players would enjoy some time for the transition in the domestic market. “The companies have time to align their operations as the new agreement would be effective till 2014, but Hero would have to organise its house in order to get right products for both Indian market and its overseas ambitions. It can source technology from international market but it is prudent to develop indigenous R&D base, which is a real challenge for the Munjals” said Rakesh Batra, partner and head of automobile practice at Ernst & Young.

With a big thrust on export markets, the group will have to cater to peculiar requirements of specific markets. “The R&D team will have to develop a core product with specifications for various markets” said an analyst from a Mumbai brokerage firm, requesting anonymity.

Hero Honda has reported sales of half-a-million units in the last two months. Sales in March stood at 5.16 lakh units and April it stood at 5.17 lakh units.


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