Honda to move R&D Base for 2 wheeler to Manesar

The last part in the amicable separation between the Hero Group and the Honda Motor Company is being initiated, making the separation of the leading players in the Indian two-wheeler market complete. Honda Motor's Indian subsidiary will be moving its research & development base for two-wheelers in India from Gurgaon to Manesar plant, even as Hero MotoCorp is forging new alliances and ties to set up its own full-fledged R&D centre. The move will help Honda Motorcycle & Limited, the second largest domestic two-wheeler maker today, to churn out new models faster, especially in the mass market category, and take on its erstwhile partner Hero Group head on to achieve its long term goal of becoming the number one two-wheeler maker in the country. ET learns that the R&D centre, which runs under the company called Honda R&D India Private Limited (HRID), will move from a rented set up at IFFCO chowk in Gurgaon to an integrated R&D set-up in the HMSI Manesar plant, where a new building is being currently built. The centre is likely to be operational in the next three to six months. Honda Motor Company is expected to invest "several hundred crore" in this expanded set-up and aims to more than double the number of engineers to 200-300, said people close to development. The new set-up will move beyond developing minor model changes to styling and design, prototype development, testing & validation and component development with vendor to offer products faster at lower cost. An email query to Honda Motorcycle & Scooters India and Honda R&D India Private Limited did not elicit any response. The Hero MotoCorp spokesperson told ETthat it is an "internal matter and such a development, if any, will have no effect whatsoever on our product launch plans". "We are strengthening our own capabilities both organically as well as through strategic tieups, such as with EBR and AV," the spokesperson added. Before the break up, HRID used to work for erstwhile Hero Honda and Honda Motorcycle's future products, now it will solely focus on the needs of HMSI. When Honda was Hero Group's partner, HMSI was barred from entering mass market, but now with both the companies on their own, the HRID will be working aggressively on developing new mass market motorcycles and will be in a position to react to market needs more quickly with new models "If you want to compete with Hero, then you need to have inhouse capabilities. With this move, HMSI will be able to bring newer models at quick pace. Apart from model improvement, the introduction time will improve dramatically," said an official familiar with the matter. The Honda Motor Company's technology agreement with the Hero Group expires in June 2014. The Pawan Munjal-promoted company will, however, continue to source products and technology from Honda's R&D bases in Thailand and Japan. In fact there are two or three new products lined up by the Hero Group with the support of Honda technology which will be launched in the next 12-24 months and these includes 100 CC bike Passion XPro and a 125 CC Bike Ignitor, which the company showcased at the Auto Expo.