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Clockwise from top left: The featherweight Hastur 620cc Streetfighter; lightweight 250cc HX250R sports bike; 35 kg SimplECity urban electric motorcycle; 100 kg 'ion' fuel cell prototype with two-wheel-drive, hubless maglev wheels, collision detection & avoidance, telematics, Lithium-Air batteries and futuristic M-Link suspension; ZIR superscooter; LEAP Serial hybrid scooter, world's most fuel-efficient scooter with 200 mpg (U.S.) and 240 mpg (imp) PLUS electric.
When Hero MotoCorp Managing Director Pawan Munjal pronounced "the dawn of a new era" at a press conference prior to the opening of Auto Expo in New Delhi last week, his words meant much more than customary auto company MD rhetoric. When Honda and Hero decided to part company in December 2010, with Honda’s long term agreement to provide technology to the Hero Honda company until the end of 2014 looming, Hero faced the seemingly insurmountable task of replacing Honda's world-leading motorcycle designs inside exactly four years.
Whether it liked it or not, Hero MotoCorp has been entering a new era since it agreed to pay Honda US$1,000,000,000 for its 25 percent share of the publicly listed Hero Honda, (a company with 50 percent market share of Indian motorcycle sales) and then face its former partner, the world’s undisputed heavyweight champion manufacturer of two-wheelers, as a direct and determined competitor.
The battle is now on for market leadership in the world’s biggest motorcycle and scooter market, with battles that will impact markets globally soon to follow.
We have been challenging the routine and the conventional ... our new motto is to drive change through path-breaking innovations ... We have now successfully developed an ecosystem of technology research and development that is designed to think beyond the obvious and deliver future-ready mobility solutions.” Pawan Munjal. Hero MotoCorp Managing Director and Chief Executive Officer
After three years of Hero MotoCorp preparing for the end of 2014, the critically important 2014 Indian Auto Expo was “show time” in more ways than one. It was the final opportunity to deliver a convincing new range at India’s most important auto show before it becomes entirely reliant on its own resources.
Over the course of the Auto Expo, Hero delivered on that vision with a broad range of new motorcycles and scooters and several convincing prototypes and pre-production models that demonstrated just what can be achieved with two wheels when you really think about it.
Hero MotoCorp is India’s largest motorcycle manufacturer and as a stand-alone company, the world’s largest motorcycle manufacturer too. Dr. Brijmohan Lall Munjal began the family business in 1956, manufacturing bicycles in Amritsar – the company was named Hero Cycles.
As India's massive population needed transport, the company's bicycle manufacturing business grew every year, becoming the largest bicycle manufacturer in the world during the early 1980s. Hero Cycles’ founder Dr. Brijmohan Lall Munjal is now the Chairman of a board of 11 which includes three other directors with the surname Munjal. It may be a publicly listed company, but it is still very much a family company in many respects.
Using the cash generated by the bicycle business, Hero Cycles partnered with Honda to create Hero Honda in 1984. The partnership has been very successful with well publicized sponsorships and corporate citizenship efforts and a dealership network of 7000 touchpoints that have made it a very visible company that India is proud of – a national icon of Indian business success.
Using Honda technology and Hero’s deep rooted local knowledge of the vast and complex country’s transportation needs, Hero Honda achieved double digit growth every year to become the world’s largest single manufacturer of two-wheelers, driven by a dominant share of the Indian two-wheeler market, which overtook China to become the largest motorcycle market in the world in 2012.
Honda is going after Hero’s dominant Indian market share, and Hero, knowing its near 50 percent share of the world’s largest market will be difficult to defend in the face of massively increased competition, is expanding into new markets.
Initially, Hero will target developing countries where the two-wheelers it is crafting for its home market needs will be considered most desirable – the developing markets of Africa, South America and Asia. Countries slated for initial Hero motorcycle distribution include Sri Lanka, Tanzania, Uganda, Mozambique, Peru, Nepal, Mozambique, Kenya, Honduras, Ivory Coast, Guatemala, Salvador, Egypt, Ecuador, Democratic Republic of Congo, Burkina Faso and Angola.
Hero is standing strong at present, with only minor sales erosion in its home market to date. Honda’s concerted push for market leadership is hurting the former number two market share holder Bajaj much more than it is hurting Hero. Honda moved into second place in the market during 2013 and by December, had increased its margin over Bajaj considerably.
In December 2013, Bajaj sold 260,645 bikes, Honda sold 296,144 and Hero sold 524,990. By comparison, in December 2012, Bajaj sold 298,350, Honda sold 217,498 and Hero sold 541,615. That’s 12.6 percent down for Bajaj, 3.0 percent down for Hero and 54 percent up for Honda. All the other major manufacturers grew year-on-year in December, with Yamaha 13 percent up, TVS up 2 percent, Suzuki up 10 percent and Mahindra up 267 percent.
In January 2014, Hero MotoCorp sold 489,322 two-wheelers (494,109 in January 2013 so down 1 percent), Bajaj sold 167,869 (196,023 in January 2013 so down 14.4 percent), and Honda sold 153,930 (105,968 in January 2013 so up 45.2 percent), in a market which grew to by 8.85 percent to 1,313,796 units from 1,206,931 in the January, 2013.
Source: Gizmag
