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The two-wheeler industry has been witnessing a double-digit growth for the past couple of years. We expect the trend to continue in the coming years.

Brijmohan Lall Munjal ,
Chairman, Hero Group

 

There is immense potential in the Indian two-wheeler industry

The venerated patriarch and visionary of the Hero Group, Mr. Brijmohan Lall Munjal, is a first-generation entrepreneur who started very small and through sheer hard work and perseverance has today made his two-wheeler venture the World's No.1 Two-Wheeler Company, a distinction hitherto held by a Chinese company. That is not all. "Splendor," which was launched in 1995 and sold 791,000 units in 2001, has emerged as the largest-selling motorcycle model in the world.

The Hero Group comprises many backward integrated two-wheeler related companies, of which the Hero Cycles and Hero Honda constitute the major players. Annually, Hero Cycles produces 5.7 million bicycles while Hero Honda churns out 1.42 million two-wheelers. Also, Hero Cycles has been the largest manufacturer of bicycles in the world since 1984 and figures in the Guinness Book of World Records.

Mr. Munjal shared some of his knowledge, ideas and expertise with Bhuwan Sharma and Himanshu Kumar Singh of Amity EduMedia. Here are the excerpts:

Despite severe competition from companies like Bajaj and TVS, Hero Honda’s share of the motorbike market is still over 50%. How long can you maintain this position?

We have been witnessing a healthy double-digit growth and hope to continue the same in the future. Hero Honda is a customer-focused company. We believe in offering the best possible product-value to our customers. Our customers appreciate this and we feel this has helped us retain our position as the number one player in the industry.

Onslaught of foreign bike companies is still not as serious as it was experienced in the car segment. But they are arriving. For example, the Salim Group of Indonesia is planning to set up a 5-lakh per annum capacity two-wheeler unit in West Bengal. Do you see any serious erosion in the share of indigenous bike manufacturers in the Indian market?

The entry of new players always leads to an increase in competition. But competition is important for the growth of the industry. We feel there is immense potential in the Indian two-wheeler industry for everybody to exist and expand the market.

In the light of Indian people’s consciousness of value for money, what are the chances of success of high-end bikes (500 cc or more) in India? Do you have any plans of entering into this segment?

I feel the customers now have become more discerning in their purchases than before. The aspiration levels have also gone up. We have seen an increase in the share of deluxe segment over the last couple of years which clearly indicates that people now choose to buy more expensive, higher-end products. However, we also feel that currently the contribution of the performance bikes is relatively low (about 10% of the total industry) and it will be quite sometime before this segment witnesses any serious growth.

Are there any new bikes that Hero Honda intends to launch in the near future?

We have regularly been adding new products in our portfolio and we would continue to do so in the future as well. We shall inform you as and when any new launches are confirmed.

Don’t you have plans to expand your manufacturing base outside India? Currently, which are the countries that you export your bikes to?

There are no such plans at the moment.

What is the growth trend of the automobile sector in India?

The two-wheeler industry has been witnessing a double-digit growth for the past couple of years. We expect the trend to continue in the coming years.

You have risen from nothing to become the king of the road. What is your mantra of success?

Customer-focus. We always strive to deliver the best product-value to our customers. It is they who have made us the number one player in the world and we are thankful to them for their support.

 

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