Hero No. 1 and going strong

When Hero parted ways with Honda three years ago, there were a whole lot of people who thought it was all over for the Munjals-promoted group.

If the numbers of 2013-14 are anything to go by, these naysayers would probably have to eat their words. Hero MotoCorp wrapped up with sales of 6.25 million bikes and scooters, considerably ahead of its former Japanese partner’s tally of 3.72 million units. Bajaj Auto followed with 3.42 million with TVS Motor just short of the two million-unit mark (1.99 million).

Industry sources say Hero will sit pretty so long as its killer duo, the Splendor and Passion, continue to catch the eye of the market. “Sure, they have been around for years but buyers don’t seem to mind,” an executive from a rival two-wheeler company said. These two brands account for nearly 60 per cent of Hero MotoCorp’s sales and are going as strong as ever.

Yet, there is no denying the fact that Honda is already proving to be a serious adversary. At the time of its split with Hero, it only had one plant in Haryana which was churning out 1.6 million bikes/scooters annually. Since then, the company has added Rajasthan, Karnataka and Gujarat to its expansion plans. In the following weeks, its capacity will reach 4.6 million units and, following the commissioning of the Gujarat facility, this will be close to six million units.

This remarkable buildup will happen in the next 18 months which means Honda will quickly bridge the gap with Hero unless the latter manages to replicate this kind of a feverish pace. By the end of 2015-16, Honda is targeting 40 per cent of the market and is likely to take the top slot very soon thereafter.

It will also be interesting to see what Bajaj Auto has up its sleeve while the tug-of-war between Hero and Honda intensifies in the coming months. The Pune-based company has reiterated that it will focus on its Pulsar and Discover brands in motorcycles while leveraging KTM both here and overseas. Bajaj will also continue to focus on building its exports business which could take up 50 per cent of its volumes in the next couple of years.

TVS Motor, likewise, is gradually building its numbers and will have reason to be pleased with its scooter business. The Jupiter has quickly established itself as a brand to reckon with while the more established Scooty is also in auto mode.

Indeed, scooters have been the biggest growth story of 2013-14 as evident in the portfolio of Honda, Hero, TVS, Yamaha and Suzuki. The notable exception to this list is Bajaj, once synonymous with the traditional geared scooter. The company is categorical that it will stick to motorcycles which form a larger part of the global canvas. Will it change its mind about scooters in the near future? This remains the million dollar question.

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