Hero Honda intensifies R&D, scouts for technology partner

New Delhi, July 3: Preparing for the solo journey following exit of Japan's Honda, India's largest two-wheeler maker Hero Honda is intensifying research and development programme, scouting for technology partner across the globe and even keeping the option of acquiring firms open.
The firm that has a licence agreement with Honda till 2014 said it will also be hiring "hundreds' as it looks to develop its own technology.
"This (technology) is something which we are very excited about. This (going solo without Honda) is an opportunity to develop our own R&D,' Hero Honda Motors Senior Vice-President (Marketing and Sales) Anil Dua told.
He said the company will be investing more as the company looks to build its technological prowess.
"We are recruiting for our R&D and will be recruiting more. We have had few hundred people and we will have hundreds more...We are making investments for equipments and people,' Dua said without specifying details.
The company has some small R&D set up at its Gurgaon and Dharuhera facilities, where cosmetic changes of the products are being done so far, he added.
Besides developing technology on its own, the BM Munjal-promoted auto major is also scouting for global partners.
"There are good technologies around the world. We are also looking for suppliers, partners and entities, with whom we can tie up and buy technologies,' Dua said.
The company is also open to acquire foreign firms to consolidate its position in the two-wheeler R&D space.
"If there is an opportunity, we may acquire some firms. When we are looking around, we may find strategic suitable partners and theoretically saying, yes we can acquire them,' Dua said.
Without sharing any possible target, he said it might be engaged in any field-supplier, technology or a design house.
Currently the company is in the process of finalising the process of setting up its fourth manufacturing facility in the country.
It is understood to have shortlisted Gujarat and Karnataka for setting up the plant.
Last week, Dua had said it would announce the location and investment details for its proposed fourth plant within the next few weeks.
In April, the company had announced a capex of up to Rs. 800 crore for this fiscal, a majority of which will be for setting up the fourth plant.
Hero Honda had earlier planned to announce the details of the proposed plant by last year but it got deferred due to its eventual break-up with Honda.
The company at present has the capacity to produce 61.5 lakh units annually and it can further be expanded. It has three manufacturing plants at Dharuhera and Gurgaon in Haryana, and Haridwar in Uttarakhand.
The market leader is aiming to cross 60 lakh units sales mark in this fiscal as against a total sales of 54,02,444 motorcycles and scooters in FY'11.
In 2010-11, the net profit of the company declined 13.62 per cent to Rs. 1,927.90 crore from Rs. 2,231.83 crore in FY'10.
The total income from operations during last fiscal, however, increased by 22.32 per cent to Rs. 19,401.15 crore from Rs. 15,860.51 crore in 2009-10. (Agencies)


2011-07-03



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