Domestic two-wheeler market can grow for many more years: Hero Motocorp Chairman Pawan Munjal

Hero MotoCorp has managed to retain its place as the single-largest two-wheeler maker in the world and has now set up a full-fledged R&D centre to address concerns over innovations. What next from here?

The real task begins now, now that this place is up and running. I expect them (the R&D team led by CTO Markus Braunsperger) to come up with brilliant products, to take the company's vision forward and meet the targets and objectives of creating a global brand. We are currently present in a few segments, we are leaders in some but not in all. We have to strengthen our leadership and we have to ensure that in the segments in which we are behind, we gear up and bring in exciting products to garner more market share, create new segments, expand the market, create stuff for new global markets. That's really the general idea now.

How will this centre help you scale up?

Within a few years of our solo journey, we have set up this state-of-the-art, world-class facility. The Centre of Innovation and Technology (CIT) is the result of our bold vision to position Hero MotoCorp as the leading source of innovation and green technology. With the centre now becoming operational, we have the ideal combination of world-class infrastructure and talent pool to develop products for our markets across the globe. Within this facility, we are establishing new work processes and enhancing our technical skills to global benchmarks. Our R&D team here is working on a range of products, including the commuter range to higher-capacity bikes and scooters.
The last two years have been sluggish with subnormal rains affecting demand in the two-wheeler industry. Hero had plans to sell 12 million units annually by 2020 with 10% of it coming from the international business. Are you revisiting these targets?
A lot will depend on the monsoon this year - there is the likelihood of a good monsoon after two consecutive years of sub-normal rains. If we have a good monsoon and sentiments change in the rural market, then the motorcycle market may see a positive turnaround in the second half of the next fiscal. I personally feel the two-wheeler penetration in the domestic market is still very low and there is huge opportunity for the market to grow for years to come. In terms of the projections of our sales numbers, we will have to wait and see.

What are your global plans? How many markets are you present in and how many do you plan to enter in the coming year?

In a span of a few years, we have expanded our global footprint to 26 countries across Asia, Africa and South and Central America. We will soon be launching our range of products in Nigeria, Ghana, Liberia and Guinea, thereby strengthening our presence in West Africa. Together with Nigeria, which is the largest two-wheeler market in Africa, the combined size of these new markets is around 1.5 million units per annum. Hero's products already sell in other West African countries such as Burkina Faso, Ivory Coast, Democratic Republic of Congo, Angola and Madagascar. The addition of these four markets will take Hero's presence to 30 countries across the world, which is in line with our vision to be present in 50 countries by the year 2020. In view of the ongoing global downturn and currency depreciation, we will, however, review our global business performance and strategy shortly.

Hero had plans of establishing assembly facilities to shore up its international business. What is the status of these projects?

In September last year, we commenced operations at our first overseas manufacturing facility in Colombia — becoming the first Indian two-wheeler company to set up a manufacturing plant in Latin America. The facility is located at Villa Rica in the state of Cauca, about 500 km south-west of Bogota. This plant will also act as an export hub for the Andean countries. We also had our first-ever global launch of a new product — the all new Dash scooter — in Colombia in September. As you know, Dash — called Maestro Edge in India —is one of the first products developed by our own in-house R&D team. Our second manufacturing facility at a global location is coming up in Bangladesh. This facility is expected to be operational by middle of this year.

You mentioned new segments. Would something like the Honda NAVI interest Hero?

I don't really know what it (the products) will be. It is up to the product strategy team to come up with what the customer would be looking for, or what we cam come up for the customer to create demand and then get it done from the CIT. We don't really have to follow what others are doing. If something great comes out of that, then one would like to look at it seriously.

Disclaimer: This info has been published and collected from various public & secondary resources.