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‘Splendor’s appeal remains undiminished’

S Ronendra Singh | Updated on: Jan 20, 2018

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When Hero parted ways with Honda way back in December 2010, a section of industry thought the going would get tough for the Munjals-owned company. Hero MotoCorp has, however, proved sceptics wrong and is the clear market leader in two-wheelers. It plans to take the story forward with the new Centre of Innovation and Technology (CIT) in Jaipur. Pawan Munjal, Chairman, MD & CEO, discusses the roadmap ahead in this email interview. Edited excerpts:

Five years since the split with Honda, Hero continues to go strong. What do you attribute this to?

We have not just maintained our leadership but also consolidated it in several segments and geographies. This has been possible due to the multi-focal strategy which we put in place five years back. Even before the CIT came up, we had quickly scaled up our in-house R&D capabilities and brought technological innovations in many products.

One example is the Hero-patented i3S technology which has made the Splendor iSmart a tremendous success. We followed this up with the integrated braking system (IBS) which we introduced in the Pleasure scooter. The IBS improves the rider’s safety and provides comfort of one brake handle for both front and rear wheels.

We have also given all our bikes and scooters a modern, youthful look with new graphics and value-added features, thereby keeping our entire range refreshed and contemporary.

Has retail also played a part?

We have well over 6,000 customer touch points (authorised dealerships, service & spare parts outlets, and authorised representatives of dealers). Our rural programme, under the umbrella platform ‘Har Gaaon Har Aangan’ (Every Village Every Household), covers well over one lakh villages. We have also done immense brand building over the past few years to establish ‘Brand Hero’ in the mind-space of our customers.

Critics say it is only the Splendor and Passion that drive Hero. How would you react?

We have remained the market leader for 15 consecutive years and this has been possible due to popular products across segments. What may not be well-known is that Hero MotoCorp has the largest market share even in the 125cc segment, and in February, Hero Glamour emerged the largest-selling 125cc motorcycle. We have HF Deluxe – in addition to Splendor and Passion - selling more than a million units every year.

We are also rapidly gaining market share in scooters. Maestro Edge and Duet – the first of our products developed by our own R&D team – have received positive response. That said, Splendor continues to be the most popular motorcycle and its appeal among customers has remained undiminished.

With your R&D centre in place, how do you plan to address the challenge of getting the right people for the job?

We are attracting the best of talent from not just within India but also from around the world. We already have around 500 engineers working at the Centre of Innovation and Technology (CIT) and expect this number to go up to around 600 by the end of next fiscal.

With the objective of having the right talent for specific functions, we have brought in engineers from different parts of the world and there are people from Germany, France, Japan Austria and India working under one roof here. The CIT is headed by our Chief Technology Officer, Markus Braunsperger who has come from BMW, Germany.

There are different functions such as engine development, programme management, styling design, vehicle integration, chassis development and scooter model line headed by senior technology experts. We have also elevated some Indian engineers, already working in senior positions within the existing R&D setup, to leadership roles at CIT.

Will Hero consider more intensive interaction with academia?

We have young engineers drawn from some of the best technical institutes in the country working at CIT with the average age being 30. It is not just a two-wheeler R&D centre but the nerve-centre of innovation, research and design without any restrictive boundary for creativity. Going forward, we will certainly look to strengthening our association with technology institutes.

Could you give an update on your plants?

The plant at Neemrana in Rajasthan, which we call the ‘Garden Factory’ as a true symbol of green manufacturing, has been operational since October 2014. Together with our other manufacturing facilities in Dharuhera, Gurgaon and Haridwar, our current installed capacity is 8.1 million units.

We expect to add another 7.5 lakh units once the upcoming plant at Halol in Gujarat becomes operational in the second quarter of FY 2017. We have got the land for our plant in Andhra Pradesh and will take a call on adding capacity depending on market conditions.

How are your overseas plants coming along?

We have rapidly expanded our global footprint to over 26 countries across Asia, Africa and South and Central America. We will soon be adding another four countries in West Africa – Nigeria, Liberia, Ghana and Guinea – to take up this number to 30. We sell our products in most of these countries through local distributors. Last September, our first overseas manufacturing facility became operational in Colombia.

What kind of mobility solutions would Hero look at in the coming years?

Electric two-wheelers and hybrids have a strong future and we already working on an electric scooter which is at a concept stage. However, in terms of infrastructure, the industry has a long way to go if electric vehicles have to become mass mode of transportation. As a definite prerequisite, adequate charging points have to be provided for across cities and towns for this segment to succeed.

Published on March 24, 2016
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