With Hero MotoCorp founder and executive chairman Dr Brijmohan Lall Munjal stepping down from the Board of the world’s largest two-wheeler manufacturer,
02 Jun 2015 | 7914 Views | By Autocar Professional Bureau
With Hero MotoCorp founder and executive chairman Dr Brijmohan Lall Munjal stepping down from the Board of the world’s largest two-wheeler manufacturer, Pawan Munjal, vice-chairman, managing director and CEO, has been appointed as the new chairman of the company. With this transition, the top leadership succession plan, initiated in August ...
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With Hero MotoCorp founder and executive chairman Dr Brijmohan Lall Munjal stepping down from the Board of the world’s largest two-wheeler manufacturer, Pawan Munjal, vice-chairman, managing director and CEO, has been appointed as the new chairman of the company. With this transition, the top leadership succession plan, initiated in August last year with the elevation of Pawan Munjal as vice-chairman, has come to its logical conclusion.
In a statement issued last evening, the company said: “The Board took up this matter during its meeting today as per the desire expressed by Dr Brijmohan Lall to relinquish his duties as the executive chairman of the company.” Dr Brijmohan Lall, who has been chairman of Hero MotoCorp since its inception in 1984, will now be chairman emeritus and will continue to be part of the Board as a non-executive director.
Pawan Munjal, who was Autocar Professional’s Man of the Year 2009 and instrumental in helping the bikemaker breeze through the maelstorm of the 2008 economic downturn and subsequently the split with Honda – its JV partner for 26 years – in December 2010, is now busy charting new strategies to realise the company's ambitious Vision 2020.
By the year 2020, the company aims to surpass 100 million units in cumulative production, annual bike and scooter sales of 12 million units. It also plans to have more than 20 manufacturing and assembly plants across the globe with sales in more than 50 countries by that year.
In line with its Vision 2020, Hero MotoCorp has lined up investments to the tune of Rs 5,000 crore over the next two years. Of this, Rs 1,050 crore has already been invested in its new and fourth manufacturing facility and global parts centre at Neemrana, Rajasthan, which has begun production last October. The 750,000 units capacity plant has expanded Hero’s total capacity to 7.5 million units annually. Rs 100 crore will be invested in its upcoming Bangladesh unit, Rs 200 crore in its Columbian plant, Rs 1,600 crore in its Andhra Pradesh facility at Sri City and Rs 1,588 crore at Halol in Gujarat. When all these plants become operational, it will have a production capacity of 12 million units. The investments announced also include Rs 653 crore in its Kukas R&D centre.
In the recent past, Pawan Munjal has led the company’s drive to be technologically self-sufficient and within two years of launching its new brand identity, Hero forged four strategic alliances – with US-based (but now bankrupt) Erik Buell Racing, Austria-based AVL, the Bologna-based Engines Enginering and the Milan-based Magneti Marelli to develop and manufacture new-generation fuel injection systems.
There is also a sharp focus on developing new products and Hero revealed many of them at Auto Expo 2014.
Under Pawan Munjal, Hero has remained the world’s largest two-wheeler manufacturer in terms of unit volumes sold in a calendar year by a single company since 2001, the year he took over as the MD and CEO. While the company (as of April 2015) had a 40.79 percent of the overall two-wheeler market, it commands a 53.16 percent market share of the motorcycle market and has a 16.35 percent share in scooters in the domestic market. Hero sold a record 6.63 million units two-wheelers in FY2015, its highest-ever annual sales. However, of late its monthly numbers, particularly motorcycles, have come under pressure from slackening rural sales.
In an interview to Autocar India last year, Pawan Munjal had said: “Going forward, we will bring new products with cutting-edge technology and value-added features, expand our distribution network, and engage with the customer through innovative communication.”
Given the aggressive domestic competition, particularly from Honda, and also a slowing motorcycle market, Pawan Munjal has his task cut out to drive the company onto its next phase of growth.