Being the largesT two-wheeler producer globally, with over 6.5 million vehicles a year, Pawan Kant Munjal says the company’s strategy is to be product-centric, depending on the geography in which it operates. Munjal, the chairman and managing director and CEO of Hero MotoCorp, says his company will be doing business across 50 global markets within the next three years and that its global operations will contribute 10 per cent to the overall sales of the company. In 2015-16, the company’s total income stood at a whopping Rs 28,990 crore, up 12.7 per cent compared to 2013-14.
Selling products across 35 countries, Hero is present across Asia, Africa, South America and Central America. The company is now preparing to drive Hero motorcycles and scooters into Mexico and Brazil. “The size of Hero MotoCorp in India certainly gives us the advantage as we foray into any world market,” says Munjal who considers markets across Latin America and Africa as “low hanging fruits” as there are no worthy competitors.
Talking about the growth within India, Munjal says, since the penetration of two-wheelers is still hovering around the 30-per-cent mark, there is still a lot of growth potential in mass market products in the 100-150 cc category. Hero continues to register growth in the scooter segment.
Munjal has been a staunch supporter of Prime Minister Narendra Modi government’s recent initiatives including the decision to demonetise Rs 500 and Rs 1,000 currency notes. Two-wheeler sales across companies bore the negative impact of demonetisation, as reflected in the third quarter (Oct-Dec 2106) numbers of several companies. The total income of Hero MotoCorp also declined by 11.64 per cent to Rs 6,898.64 crore in the three month period ended December 31, 2016 compared to Rs 7,807.77 crore in the corresponding period last fiscal. The company’s net profit, however, was marginally impacted. “The industry did witness some negative sentiments during the October-December Quarter, but with the agility shown by the government in bringing about a slew of measures to aid the citizens at large, the market scenario has now begun improving,” Munjal had said in a statement.
Munjal knows that Hero MotoCorp does not have a global product in its portfolio. To correct this situation, Munjal and Hero have made heavy investments in the Centre of Innovation and Technology (CIT) located at Jaipur. “CIT will come up with products that are truly global in nature and take Hero MotoCorp ahead of competition,” says Munjal. Currently, CIT is undertaking a lot of design and development work on premium products like the new Achiever 150 and Xtreme 200S. Munjal says electric vehicles, hybrids and ride sharing can become the next big thing in the two-wheeler category. Hero has already invested in a Bengaluru-based electric scooter startup Ather Energy and Gurgaon-based Rapido, a ride-sharing bike taxi startup.
On the personal front, Munjal loves travelling and playing golf. He is married and has three children. He is a mechanical engineer by profession.
BW Reporters
Ashish Sinha is an experienced business journalist who has covered FMCG, auto, infrastructure, tourism, telecom among several other beats. Ashish has keen interest in the regulatory scenario impacting different sectors. He writes on aviation, railways, post and telegraph, infrastructure, defence, media & entertainment, among a wide variety of other subjects.
