New technologies, localising components will pave way for boycotting Chinese products: Hero Cycles chairman
Talking about the impact of the cancellation of deal with China on the price of cycle parts, Munjal says negotiations with European parts suppliers are underway for thisUpdated: Jul 11, 2020 23:37 IST
A week after cancelling a ₹900-crore deal with China, chairman of Hero Cycles, Pankaj Munjal, spoke to Hindustan Times about alternatives being explored and how investing in indigenously-made cycle components is the future. Talking about the road ahead, Munjal said they are localising components with domestic vendors as well as resourcing from European makers.
“Our supplier base has shown great support in this initiative and are now investing in indigenous development of the parts that we would generally import. They understand this needs to be done in an accelerated manner. Our most recently added research and development centre in Berlin is leading the charge in this. Secondly, we are now looking at Germany, which is also our European base, as the alternative source. There are many high-quality suppliers in Europe that already work with our group company, HNF GmbH in Germany, and are more than keen to partner with us for India,” he said.
Munjal admits that it was easy to send product teams to China, get quotes and then order. “But it was not right,” he adds. “With German R&D support, we are committed to introduce new technologies to India which would be a credible alternative to the China where IPs and patents remain insecure.”
Talking about the impact of the cancellation of deal with China on the price of cycle parts, Munjal says negotiations with European parts suppliers are underway for this.
“In many models, our approach is to upgrade the product with higher quality and better functioning German component which may increase the price a little but will tremendously increase value offered to customers by making the product superior in its class,” he added.
Talking about the ₹900-crore deal that has been cancelled, Munjal said the time frame for the deal was around five years, which included life cycle of existing models and new models under development for next year. The deal included import of some high-end bicycles and e-bikes which would be readily substituted with German products without much cost impact.
It January this year, the R&D centre in Berlin was added, which is part of Hero’s acquisition in Germany, he adds.
“Components such as complex alloy frames, bicycle drivetrain, E-bike motor, battery and controllers, wheels and rims and disc brakes are all being imported from China and we are actively looking at indigenisation of these components,” Munjal said.