Erik Buell may help Hero realise its nano bike dream

New Delhi: The world’s largest two-wheeler maker, Hero MotoCorp, is working on an ultra low-cost bike. And its efforts just got accelerated by roping in multiple technology partners it has forged tie-ups with, in recent months.

In fact, it is possible Erik Buell Racing, the US-based racing bike maker in which Hero just bought 49.2 percent stake, becomes instrumental in helping Hero to finally develop a truly low cost motorcycle for India.

“We are forever working on lowering the cost of our bikes, specially at the entry level. We are today working to launch a utility low-cost bike. But a truly low-cost bike is also on the drawing board. In fact, now more heads have joined us in developing this product as we have enlisted technology alliance partners,” Hero’s managing director Pawan Munjal said in an exclusive interview to Firstpost.[caption id=“attachment_918531” align=“alignleft” width=“380”] Making low cost bikes. Reuters[/caption]

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As of now, Hero’s CD Dawn is the cheapest bike available in India and retails at around Rs 32,000. Obviously then, the low-cost bike Munjal is mentioning will come below Rs 30,000, whenever it is ready. Speaking to this correspondent in 2009, when Munjal first began work on a low-cost or Nano bike, he had said it may be some time away from fruition. He had said that contrary to popular perception, any low priced bike will also need to offer performance and sturdiness despite the lower price tag.

“Just because we have an enhanced rural focus, it does not mean that rural customers can be offered products which do not stand the test of performance or durability. In fact, rural customers need more sturdier vehicles (than urban ones),” he said.

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He had cited Hero’s earlier experience with mopeds-which he dubbed as “glorified cycles”-to emphasise that performance and load carrying capacity was essential even for a low-cost products. “We launched one of Honda Motor Co’s most popular models in 1997, called the Street. It was a step-thru motorcycle, an engineering marvel but didn’t quite work in India. Why? Because the customers saw it essentially as a moped and expected it be priced like one,” Munjal had explained then.

“Whatever we bring should certainly have a significant price advantage,” he had said. This philosophy, of offering a viable product with good performance indicators but at significantly lower prices, is unlikely to have changed. Which means the market should ready itself perhaps for a breakthrough product, which will meet all performance parameters but yet be priced significantly lower than current motorcycles.

Speaking today, Munjal said the utility low-cost bike would be a product specifically targeted at the rural Indian markets whereas the ultra low-cost product would be a different category. He said it was a myth that people like Erik Buell worked only on lifestyle or large cc bikes.

“All of my technology alliance partners are helping in the development of the ultra low-cost motorcycle.”

There is no timeframe for the launch of ultra low-cost bikes just yet.

Munjal first began speaking of a ‘Nano’ bike in 2009, just when the Tata Nano was making news the world over for India’s frugal engineering prowess.

Now, as then, Hero continues to control over 60 percent the entry level bike (engine capacity above 75 cc but less than 125 cc) market and is equally comfortable straddling the less price sensitive segments. But it is very clear that any low-priced product in the two-wheeler space cannot afford to compromise on either durability or performance.

Munjal’s work on a Nano bike comes after another big Indian two-wheeler maker successfully contract manufactured low-cost motorcycles in China and began exporting them world over. These 125 cc bikes were initially priced about Rs 25,000. Vendor had said earlier that these are most likely not a ‘step-thru’, moped kind of vehicle.

They had said any cost advantage to the company was largely on account of sourcing extensively from China.

They also point out that Honda Motor Co sells low-cost, step-thru type of bikes in some markets such as Thailand and China and any full-blooded low- priced vehicle for India would, in all probability, have to be developed from scratch.