Hero Electric promoter Naveen Munjal who has so far promised to take legal action against Hero MotoCorp if the latter decides to sell electric vehicles has now said he would be open to an amicable resolution of disputes with his uncle Pawan Munjal, chairman of Hero MotoCorp. However, both sides have denied any talks so far on settling the dispute out of court.
Naveen Munjal who recently raised Rs 220 crore for capacity expansion, has said Hero Electric would be investing Rs 700 crore towards raising manufacturing capacity to one million units. This comes at a time when Hero MotoCorp is looking to launch its electric vehicle early next year. Naveen Munjal maintains that a 2010 family agreement gives Hero Electric exclusive rights to use the "Hero" branding for electric vehicles.
"We will take all appropriate measures to protect our rights in the brand and stop any violation of our rights in the electric/environment-friendly vehicles segment. We, as a part of the Munjal Family, have always been open to amicable resolution of any disputes," said Munjal in an interview with CNBC-TV18.
However, Hero MotoCorp said there is nothing in the family pact that stops the brand from launching electric vehicles. "The family agreement is crystal clear. Hero MotoCorp is well aware of its rights, and has always acted, and will continue to act based on the best legal advice," said a company spokesperson.
Sources close to the Munjal family said the family agreement only restricts Hero MotoCorp from using the conjunctive term "Hero Electric" for its products. "The 2010 family pact neither restricts Hero MotoCorp from selling EV's or using its trademarks. The agreement made a fair division, allowing individual families to continue to do the business they were doing at that time. It also specifically allows for family groups to compete, so as not to prevent future growth," said a source close to the Munjal family.
A Hero MotoCorp spokesperson said the company's upcoming EV launch was well within the parameters of the family understanding and agreement. "The brand names used on the vehicles even as on date speak for themselves," said an official from the company. "All Hero MotoCorp products such as Splendor, Passion, Xpulse have a different brand name, and Hero MotoCorp's EV will also have a distinct name and identity," said a source.