Hero MotoCorp Ltd, the Indian two-wheeler manufacturer that split with Japan’s Honda last year, on Tuesday unveiled its new brand identity in London amid the presence of its 1,000 dealers, employees and associates.
The two-wheeler maker’s managing director and chief executive officer Pawan Munjal said the company was readying a chest to take Hero motorcycles to 30 new markets across Southeast Asia, Africa, Latin America and Central America.
It also announced the launch of two new products — an 110cc scooter called Maestro and a 150cc motorcycle called Impulse — that it designed jointly under Honda’s technology support.
Munjal said the company has also formed an alliance for R&D with a technology firm in Europe that will help it design engines and products. He said the company would also look at acquisition opportunities that will help it strengthen technology and reach to international markets.
Hero faces challenges in terms of technical expertise post the demerger of joint venture with Honda and is exploring various options for alliances. There also is going to be a heavy focus on R&D. It is also building a global parts centre in India.
Munjal said that over the next five years, the company will invest more money than it has invested so far in the last 27 years of operations. It has so far invested over $1 billion in India.
Hero is also in the process of commissioning two manufacturing and assembly units in Southern India and Western India, respectively.
A lot many changes at the company await now as it restructures itself, Munjal said. The company recently changed name to Hero MotoCorp from Hero Honda Motors Ltd. While initially the focus will be on exporting bikes to newer markets, Hero will also look at opening assembly units in markets like Africa or Latin America in order to form clusters and operate across the globe.
The company is looking at selling 10 million bikes a year in five years and looking at annual turnover of $10 billion. Of this, Munjal said, international volumes are expected to contribute 10% to sales.
The company has a 55% market share of the motorcycle market and a 15% market share in scooters. It has a capacity of 6.1 million bikes a year from its three existing manufacturing units. The upcoming manufacturing and assembly unit in Southern India is likely to add a capacity of 7.5 lakh.
Honda sold its 26% stake in the company to India’s Munjal family while the technology agreement between Hero and Honda permits former to use the joint name in products till 2014. But Munjal said the company was hungry to grow under its own brand name and technological expertise.
Brijmohan Lall, chairman, said post the split with Honda in December 2010 the company had apprehensions of bad reactions from market and a potential threat to market share; “but since December we have sold 2.5 million motorcycles, the highest growth in volume for us.”
The company took over 30 years to move from making cycles under the brand name Hero to motorcycles under brands CBZ, Karizma and Splendor.
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