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India's Hero MotoCorp Plans Global Expansion

11 August, 2011

India’s Hero MotoCorp, the world’s largest producer of motorcycles and scooters, has announced its intention to expand globally, with plans to sell vehicles on three continents and nearly double its unit sales within five years.

The company, whose family shareholders bought out its former partner Honda Motorthis year, said it would invest about $1bn to expand internationally in south-east Asia, Africa, and Central and Latin America.

Pawan Munjal, the company’s chief executive, said the company would begin by exporting, but was studying “all options”, including local production in other countries.

“We’d like to become a global company now,” Mr Munjal told the Financial Times.

“We are the world’s largest, and we’d like to become the world’s best two-wheeler company in every sense of the word, including innovation, technology, products, and customer service.”

Mr Munjal made the remarks at a glitzy corporate rebranding event at London’s O2 dome, to which the company flew about 1,000 dealers, employees and other guests from India and hosted celebrities including former tennis star Boris Becker, Bollywood actor Shahrukh Khan, and ex-Formula One racing driver David Coulthard.

To the accompaniment of dancers and dhol (traditional drum) players, the Indian company unveiled a new logo and television advertisement with a song written by AR Rahman, who penned Jai Ho, the theme song to the film Slumdog Millionaire. “There’s a hero in each one of us,” the song declares.

Motorcycle sales are booming in India and across Asia, and Hero MotoCorp is the country’s largest producer, claiming more than half the Indian market for two-wheeled vehicles.

Mr Munjal said that the company, formerly called Hero Honda, was aiming to sell about a 10th of its vehicles internationally, up from about 2 per cent now, and boost unit sales to 10m within five years, up from 5.4m in 2010.

“Over the next five years, we will invest more than the sum total of investments we have made in the last 27 years,” Mr Munjal said. He said the company had invested Rs45bn ($1bn) in its operations since it was founded in 1984.

The Munjal family bought out Honda’s 26 per cent stake earlier this year for Rs3.84bn ($854m) and still holds a 52 per cent stake in the company.

In January the company signed a licence agreement with Honda until the end of 2014, under which it will continue to receive some products from the Japanese producer.

Mr Munjal said the company was close to a tie-up with an unnamed European technology firm on products, technology, and research and development, and was also open to alliances with other motorcycle companies.

In addition to Hero’s overseas plans, Mr Munjal said that the company was looking at installing capacity in India at two new plants, one in western India and another in the south of the country.

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India's Hero MotoCorp Plans Global Expansion

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