Collaboration to be a key pillar in Hero MotoCorp's new growth drive

by Sumantra B Barooah 21 Feb 2020


Hero MotoCorp's Pawan Munjal: "There could be multiple partnerships going forward for various different things."

'Be the future of mobility', that's the new vision for Hero MotoCorp as it works on multiple strategies aimed at sustainable growth in an age of disruptions. Some of them could see the Rs 33,651 crore company venture into new areas of mobility, perhaps beyond motorcycles and scooters. And beyond vehicles, to services too. 

To achieve its goals in the fast-changing and disruptive mobility industry, Hero MotoCorp could strike some new partnerships. "There could be multiple partnerships going forward for various different things," says Pawan Munjal, chairman, MD and CEO, Hero MotoCorp. Among the new partners could also be a market rival, or two. "Friends and enemies are getting together. This is the era of partnerships, so anything is possible," says Munjal.

Not quite a rival, but premium motorcycle maker Harley-Davidson is reportedly in talks with Hero for a crop of midsize motorcycles, an emerging segment in India and overseas too. Hero's peers TVS Motor Co  (with BMW Motorrad) and Bajaj Auto (KTM, Husqvarna, Triumph) have made struck different kinds of partnerships to enter the premium motorcycle segment, while offering their partners an opportunity to play in segments, and markets, that offer much bigger volumes and thereby help them grow well.

To help it be in tune with the fast changing times, Hero MotoCorp has reorganised its organisational structure to add a new unit called Emerging Mobility Business Unit. This unit is tasked to identify new opportunities in the mobility space. In this quest, the company is working with start-ups – external and internal. 

Quark 1, a concept that can be operated as a two- or three-wheeler is one example of a project by an internal start-up. Based on an 'Advanced Modular Scalable Electric Platform', Quark 1 is one of the multiple projects under HeroHatch, the company's incubation centre and indicative of the fact that the OEM's future mobility solutions may also have more than two wheels. An online marketplace for pre-owned two-wheelers that's currently that's currently undergoing market trials is another project by an internal start-up. Ather Energy, where Hero MotoCorp has a 31 percent stake is an example of the OEM partnering with an external start-up.

New big-ticket investment planned
Hero MotoCorp will invest "in the region of" Rs 10,000 crore on R&D, alternate mobility solutions, network expansion, brand building across the globe, and more. Rajat Bhargava, Head - Strategy & Performance Transformation, Global Business & Emerging Mobility, Hero MotoCorp says, "There are also projects in the pipeline which are catering to the intersection of connected, electric and sharing."

There could be collaboration for some of these too, with the goal of being a strong player in the mobility industry. “To capture the future of mobility, first of all there needs to be clarity on where do we want to participate, and who broadly is a friend or an enemy or who you want to collaborate with. Under that there are multiple initiatives, multiple ways in which you need to seed these things, and that's what will emerge, and finally adapt to future of mobility or the emerging mobility," says Bhargava.

After a decade of successfully riding solo, after parting ways with Honda, the current decade will see Hero MotoCorp take a series of steps to 'be the future of mobility'. It will also see the OEM, which has increased its exports business to reach around 40 markets now, to take steps to what Munjal says as "find our rightful place in the global business".

"If we all meet together in 5-6-7 years, I think Hero would have gone a long step compared to what you see today," says Malo Le Masson, head – global product planning, Hero MotoCorp. And much of this could be the result of collaboration, a strategy which is more of a norm than exception today in the automotive industry. Could any of the collaborations be with another Indian OEM? As Munjal says, in this era of collaboration, "anything is possible".