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Old 9th August 2013, 12:56   #1
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Default Hero MotoCorp reveals plans for world dominance

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It has been three years since Hero MotoCorp (then Hero Honda) parted ways with long term joint venture (JV) partner Honda. While Hero MotoCorp has managed to hold on to market share, Honda has made no bones of its intention to displace Hero MotoCorp from the top of the hustings by 2020. Honda aims to sell 1 million two wheelers/year in India by 2020. Hero MotoCorp, after announcing its 1 Billion USD worth export push a while ago, has now unveiled its plans to overcome the growing threat from Honda.

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The first cog in Hero MotoCorp's strategy of boosting volumes is closely aligned to the Indian festive season, which has just kicked off. The Indian two wheeler maker, and the world's largest one by volumes, will launch no less than a dozen new products over the next two quarters. Hero MotoCorp has not revealed the exact details of these products. So, it is too early to fathom whether these products would be refreshed variants or all new models. Past experience points to the former approach.

The motorcycle maker has already established assembly facilities at Africa and in the coming years, a new assembly line at Mexico will be added. The assembly units abroad, are intended to help Hero MotoCorp achieve its target of bagging 10% of its sales from international markets by 2017. Until the expiry of its joint venture with Honda, Hero was precluded from selling its products in international markets other than Nepal and Sri Lanka. Now though, the whole world is Hero's playground, given the termination of the Hero-Honda JV.

Hero plans to more than double its current turnover of 24,000 crore rupees, to 60,000 rupees, by the year 2020. To achieve this seemingly huge number, Hero plans to sell 50 million two wheelers by 2020. Incidentally, the two wheeler major just rolled out its 50 millionth two wheeler yesterday. To sell this massive number of two wheelers, Hero MotoCorp plans to double the number of its assembly units, to 20. By 2020, Hero plans to produce 12 million two wheelers each year, from 20 assembly lines at Indian and international locations. .

From the projected numbers, it is clear that Hero MotoCorp is looking to retain its dominance of the global two wheeler market by dint of sheer volumes. The two wheeler maker has also revealed an approach similar to that of Bajaj Auto: A focus on EBITDA margins. Hero MotoCorp is aiming at a 20% EBITDA margin, an industry leading figure and a number similar to what Bajaj Auto consistently manages. On the whole, Hero MotoCorp's new vision revolves around leading the market in terms of both volumes as well as profitability.

With an aim to sell its two wheelers in over 50 countries across the globe by 2020, Hero MotoCorp's lofty ambitions would need to be backed up by excellent products. While the two wheeler major has tied up with technology providers such as Erik Buell Racing, Ricardo and AVL, the first products featuring the new (non-Honda) engines will roll out only next year. It will be interesting to see how the market responds to the newly developed engines on Hero MotoCorp's commuter motorcycle range.

The Indian two wheeler giant has also announced plans of building 100% made-in-India products (read, engineered) over the next few years. The company has been shoring up its research and development wing, a division previously restricted to cosmetic facelifts when Hero was in a joint venture with Honda. While results are yet to show, the next few years promise to be interesting as Hero and Honda will be locked in a battle for volume supremacy in India, a country that will soon become the undisputed world leader in terms of two wheeler volumes.

Last edited by JayPrashanth : 9th August 2013 at 12:59. Reason: News Link Added
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Old 20th January 2015, 15:48   #2
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Default Re: Hero MotoCorp reveals plans for world dominance

Very encouraging news for Hero Enthusiasts, Hope their newer scooter models will only improve on this performance.
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Old 20th January 2015, 17:09   #3
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Default Re: Hero MotoCorp reveals plans for world dominance

As an Indian, it makes us very proud, as an Indian customer, I really hope that the after sales services also improve. With the increased number of sales comes increased number of after sales services which is equally important too.
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Old 20th January 2015, 17:40   #4
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Default Re: Hero MotoCorp reveals plans for world dominance

Its easy for them to talk in terms of figures saying they will sell so many unit of such and such.Most of us in India know that the A.S.S isn't all that good.Why not concentrate more on improving customer satisfaction I wonder.Obviously they might have plans for that too,may just not be apparent at the moment.

I sincerely hope that they think along the lines of Quality not Quantity.


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