‘We are back to double-digit growth and the momentum is with us.’

Pawan Munjal, vice-chairman of Hero MotoCorp, has been instrumental in driving change and showing the company’s aggressive new face four years after it parted ways with erstwhile Japanese partner, Honda. An exclusive interview by Rishad Cooper.

Congratulations on your recently taking up the vice-chairman’s mantle at Hero MotoCorp. Looking ahead, will this in any way change the leadership structure at the company?
Thank you. It does not change the structure. What it does instead is strengthen the leadership and give us added responsibility to take Hero MotoCorp to the next phase of its growth. We have set the benchmark higher and we are absolutely confident that we will be able to live up to the expectations.

Hero has successfully maintained its leadership position and is also now back to double-digit growth. What is your strategy to maintain this growth trajectory?
You are right. We are back to double-digit growth and the momentum is with us. In fact, we have not only maintained our leadership, we have further consolidated it. So it only proves that whatever we have been doing, we have been doing it right. Going forward, we will keep doing the same – bring new products with cutting-edge technology and value-added features, expand our distribution network, and engage with the customer through innovative communication.

Can you shed some light on Hero’s upcoming new products for India’s important and fast-paced market, as well as export markets in which you now have a growing presence?
The Splendor iSmart is an excellent example of what technological innovation can do to a product. The i3S technology on the Splendor iSmart has completely redefined this segment in the market. We have also launched the new ZMR, Karizma and the Xtreme in the market and the response has been very encouraging.
There are at least three new products lined up for launch heading into the festive season – Passion ProTR, Splendor Pro Classic and Xtreme Sports. The Passion ProTR is already on sale in some markets, and it will be available in all our dealerships here in a few weeks.

Over the past year or so, you have steadily been increasing your global footprint and presence. Can you elaborate on this focus and share some plans?
Our global expansion strategy is aligned to our ultimate goal of being present in as many as 50 countries by 2020. We are initially targeting markets where the volumes are high and our products can be sold with minimum or
no modifications.
Our products are currently sold in India, Sri Lanka, Nepal, Bangladesh, Egypt and Turkey in Asia; Peru and Ecuador in South America; Guatemala, Honduras, El Salvador and Nicaragua in central America; Kenya, Mozambique, Tanzania and Uganda in East Africa; and Burkina Faso, Ivory Coast, Congo and Angola in West Africa. We are also targeting an entry into the Brazil market by 2016.
We are setting up two manufacturing plants at overseas locations, in Colombia and in Bangladesh. Both the plants are expected to go on stream in financial year 2015-16. In partnership with its local distributors, we also have assembly units in Kenya, Tanzania and Uganda.

Last year, you shared your vision to surpass sales of 12 million two-wheelers by 2020. With the Neemrana plant coming up in June, your installed capacity will soon be 7.65 million units. And, once the Halol plant and the proposed plant in South India become operational, will Hero MotoCorp be on track for 12 million sales even before 2020?
You are right. We will soon take a call on the location for the plant in south India, and commence construction once the plant at Halol in Gujarat goes on stream.
With the plants in Colombia and Bangladesh also slated to start production sometime in 2015-16, we will have a total installed capacity of 12 million units well before 2020.

Is it reflective of your sales projections going forward?
I would not like to give a guidance on sales at this stage. As I said, the momentum is with us and we are confident of consistently clocking double-digit growth. However, the industry continues to be sluggish and we will also have to see how the economy performs in the short to medium term.
The government also has to take a long-term view of the industry and extend the current excise rates on two-wheelers by another couple of years so as to enable the sector to make a sustainable recovery.