Hero MotoCorp's long-term vision is to make cars, CVs: Pawan Munjal

Jun 19 2014, 11:05 IST
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Hero MotoCorp managing director & CEO Pawan Munjal is a huge sport fan. Hero MotoCorp managing director & CEO Pawan Munjal is a huge sport fan.
SummaryHero has proved naysayers wrong by protecting its market share after split with Honda.

Hero MotoCorp's managing director & CEO Pawan Munjal, a huge sport fan, was visibly relaxed as we sat down for a chat at the Arena Corinthians in Sao Paulo, Brazil, for the opening match of the FIFA World Cup 2014. Itís been two long years of hard work since the split with Honda, and Hero has proved most naysayers wrong by maintaining strong volumes and protecting its market share despite Hondaís aggressive expansion. In a free-wheeling interview with Roudra Bhattacharya, he talks about his vision for the Hero brand, which he hopes to take beyond two-wheelers ó into cars and even commercial vehicles. Excerpts:

Hero MotoCorpís managing director & CEO Pawan Munjal, a huge sport fan, was visibly relaxed as we sat down for a chat at the Arena Corinthians in Sao Paulo, Brazil, for the opening match of the FIFA World Cup 2014. Itís been two long years of hard work since the split with Honda, and Hero has proved most naysayers wrong by maintaining strong volumes and protecting its market share despite Hondaís aggressive expansion. In a free-wheeling interview with Roudra Bhattacharya, he talks about his vision for the Hero brand, which he hopes to take beyond two-wheelers ó into cars and even commercial vehicles. Excerpts:

Your R&D strategy has been aggressive. Are you looking to take Hero beyond two-wheelers?

Yes, that is the long-term vision. We would like to enter cars and CVs, but this will take time as such products are complicated to develop and the market is very competitive. Right now, we are focused on improving local product development.

With Honda expanding rapidly since the split, many experts believed Hero would sharply lose market share.

Many didn't give us a chance, but we did well. In August 2010, we had said we were serious about going global and spoke of having a 10% share for exports out of total sales of 10 million. We have made major strides since and, in the last 8-9 months, have entered 18-19 markets . Previously, we were restricted by the JV with Honda, with Colombia being the only overseas market.

You are here for the Fifa World Cup. Tell us about your association with football.

Personally, golf is my favourite. But football is easily the most popular sport globally and something we want to be associated with as we spread our operations.

I'm big on the sport largely because my son is a supporter of Newcastle United in the EPL. In fact, we have received requests for jersey sponsorships from a few EPL teams recently, including Tottenham. When we expand to developed markets, we will be look at such options.

Hero has had a long association with cricket. But we now see you promoting other games both at home and overseas.

We have not stopped our cricket sponsorships, but decided to start supporting other sports as well. I believe Indian corporates need to spend much more on other sports like hockey, badminton, football and kabaddi, if they are to be brought up to international standards.

South and Central America seems to be your focus market. But unlike most Indian auto firms, southeast asia is not on your radar.

We have decided to focus on Latin America and Africa, apart from developed markets. Southeast Asia is a big market, but very competitive with Japanese players commanding huge share. We will get there at a later stage ó right now it would stretching ourselves too much as we already have a lot on our plate.

We have launched our bikes in markets like Peru and Ecuador, and are now starting our first fully-owned overseas plant in Colombia next year. Starting 2016, we will supply to Brazil from this plant and, as volumes grow, we will scout for land in Brazil as well.

We are also looking to enter Argentina, where we are looking for a partner. However, there are several challenges there, such as a volatile currency. So we need significant export volumes to make it viable.

Will you open new marketing offices in other continents?

Right now, we are largely operating out of India, but soon we will have regional offices in different markets and have already started hiring overseas. South America will initially be handled out of Colombia, till the Brazil operations come up. For North America and other developed markets, Erik Buell Racing (Hero has about 49% stake) will be our base.

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