Dr Pawan Munjal of Hero Motocorp said they are set for a quick transition to BS-VI. The company has already discontinued over 50 BS-IV products and over the next 1-2 months would probably transition into BS-VI with the entire range, he said.
The company is also well on their way for moving towards electric products, he said, adding that their association with Ather is proving to be mutually beneficial.
The biggest lesson one can learn from the slowdown is that one should always be prepared to face challenges because life is not always about going north, said Dr Pawan Munjal of Hero Motocorp in an interview with CNBC-TV18, from the sidelines of Hero World Challenge.
He said, the aim is to become a global company at every level. "So, there is gender diversity, there is cultural diversity and there is diversity of different nations, which are becoming part of Hero," he said.
Below is the transcript of the interview Q: You have been associated with golf for over 20 years, your association with Tiger Woods probably goes back six years, he is a man who has had his ups and downs, he has made a comeback as well, how is this relationship important for Pawan Munjal and for Hero Motocorp?
A: Extremely important. Not just for Hero Motocorp, not just for Pawan Munjal but also for Tiger Woods. It is a hugely mutually beneficial relationship and we have seen that in the past six years; let us just take the example of Tiger Woods, he has seen his ups and downs and we have stuck with him through thick and thin, through his ups and downs. Clearly, he has come out of a lot of difficult stuff whether it is his body, whether it is the surgeries or all the other situations and he has come back out. He has won a major again, he has won the Masters, recently he has won the championship in Japan and before that in East Lake.
He is right up there, back up there, number 7 in the world again and I am sure he will keep climbing up. Next week he is captaining the US team for the President Cup in Melbourne for Hero Motocorp. It has been a greatly beneficial relationship. I have been saying this to media for the last couple of days.
Hero is a huge brand back home in India. Hero was mostly a domestic brand but when we started going out of India, going out of our shores, into various other markets whether it was Africa, Latin America, Central America, the brand was almost unknown in other markets, other countries. Our association with Tiger gave us immediate recognition. People know Tiger across the globe whether the person is a sports person or not but Tiger Woods is a global icon, not just a sporting icon. So the association has been great.
You have been around here, you are seeing the brand Hero all over this course, you are seeing people wearing Hero hats, everyone is asking question about when Hero is bringing its motorcycles into the American markets etc. so that is what the association brings.
Q: Clearly, golf is a part of your global strategy as well and the global economy has been facing some headwinds, we are seeing a slowdown in global growth as well. You are present in 39 markets including Latin America, Middle East, North Africa, somehow has this global slowdown made you revisit your global strategy?
A: There seems to be a slowdown across the globe. Especially so in oil markets and many of our global markets are oil dependent markets. We have seen market shrinking, we have seen Columbia & Nigeria market shrinking, we have seen Argentina going through hell and similarly, many other markets facing a lot of headwinds.
So, we have gone back and looked at our strategy. We had plans to go to 50 markets. However, right now we will focus on the big markets and try and increase our numbers in these markets, try and increase our market share in these markets.
Q: The focus would be on consolidation of your presence in existing markets like Latin America, Middle East and North Africa or is there plan to go into other areas?
A: It will be on consolidation. Within these markets, it will be on consolidation and growing the larger markets.
Q: The premiumisation of Hero Motocorp, we have seen you bringing out the Xtreme 200s, the XPulse and also we believe that Hero Motocorp is trying to change the entire brand experience for a customer who comes to the showroom, how are you personally steering this forward?
A: Yes, I am personally driving this agenda. In the recent past you must have seen some of the new introductions with the XPulse and some of the other new bikes in the 200 CC range. There is excellent response from the market, from the customers and we have more stuff in the pipeline coming in the premium segment. It is not just the products, it is the brand, it is the marketing and it is the 360 around the brand that we are doing.
We are working today with global consultants on the visual identity and the insides of our dealership. We will be changing a lot of stuff in our outlets soon.
Q: So, we can expect more products from brand Hero Motocorp, maybe you would like to target the middle-weight segment as well?
A: As I said, we are working on various other product segments in the premium range and over the next few years, we will be coming out with newer stuff.
Q: To focus on gender diversity. We believe that as the brand grows globally, you are focusing a lot on having employees across the spectrum.
A: Yes, we are a global company not just in terms of selling our products into global markets but we have gone into other markets with manufacturing in Columbia and Bangladesh and within India also, in our company we have expatriates. So we are trying to become a global company at every level.
In terms of diversity, yes, there is gender diversity, there is cultural diversity and there is diversity of different nations, which are becoming part of Hero.
Q: BS-VI, that is something that the entire auto industry is talking about. You have already launched a BS-VI variant, by when do you think you will be able to make a complete transition?
A: We are leading a charge there on the BS-VI front. The first BS-VI motorcycle introduced in India is from Hero and currently we are working on all our other range of products. We have already discontinued over 50 BS-IV products so we can quickly transition into BS-VI. We have already started production of various other models. Over the next 1 or 2 months we probably will be transitioning into BS-VI with entire range.
Q: So the entire production line would be changed in the next 1 or 2 months?
Q: Talking about the electric strategy for Hero Motocorp, you have said in the past that electrification has to happen, this is something that everyone will have to work towards. How are you writing Hero Motocorp’s electric story?
A: Hero Motocorp started writing the story couple of years back even before there was any talk from the government or any push from any government body. When we had the arrangement with EBR, we had brought in the hybrid scooter at the Auto Expo. It’s unfortunate that the company went under and the programme was shelved there, but then we went and took equity in Ather - a startup in Bengaluru who was already selling electric bikes.
We have our own incubator in-house HeroHatch, which is also as a team working on electric product, and in our own R&D there is engineering and research work going on on electric products. So we are well on our way to electrification of our products.
Q: How has Ather experience helped?
A: It has been a good experience. It’s learning for both of us; Ather learns from Hero, Hero learns from Ather. Those guys are not expert in manufacturing but Hero is. Those guys have expertise in electrification; in the battery, battery management system etc., so it’s a mutual beneficial arrangement.
Q: Are we going to see Hero Motocorp bringing out an electric scooter or motorcycle anytime soon, maybe in this fiscal?
A: You will surely see Hero Motocorp bringing electric products but right now I will not be able to give you a timeframe.
Q: But that is definitely something in the pipeline?
A: That’s definitely something in the pipeline for sure.
A: Very simply, life is not always about going north. There will be challenges in life, there will be difficult times in life, sales will go up sometimes, sales will come down sometimes, the economy will go up and the economy will come down sometimes. So, we need to be prepared to face these challenges. When required, we need to buckle up our shoes and tighten our belts and do whatever best we can do for our consumers and customers to be able to give them the right product and the right quality.
Q: To sum up the mood back home, this last one year was tough for the industry and as a veteran of the auto industry, somebody who has seen the industry over the last 30 years - what do you think is the biggest lesson from what has happened over the last one year from this slowdown?