Company Profile

Company profile

“Hero” is the brand name used by the Munjal brothers for their flagship company Hero Cycles Ltd. A joint venture

between the Hero Group and Honda Motor Company was established in 1984 as the Hero Honda Motors Limited

At Dharuhera India. Munjal family and Honda group both own 26% stake in the Company. In 2010, it was reported

that Honda planned to sell its stake in the venture to the Munjal family.

During the 1980s, the company introduced motorcycles that were popular in India for their fuel economy and low cost.

A popular advertising campaign based on the slogan 'Fill it - Shut it - Forget it' that emphasised the motorcycle's fuel

efficiency helped the company grow at a double-digit pace since inception. The technology in the bikes of Hero

Honda for almost 26 years (1984–2010) has come from the Japanese counterpart Honda [10]

Hero MotoCorp has three manufacturing facilities based at Dharuhera, Gurgaon in Haryana and

at Haridwar in Uttarakhand. These plants together are capable of churning out 3 million bikes per year.[11] Hero

MotoCorp has a large sales and service network with over 3,000 dealerships and service points across India. Hero

Honda has a customer loyalty program since 2000,[12] called the Hero Honda Passport Program.

The company has a stated aim of achieving revenues of $10 billion and volumes of 10 million two-wheelers by 2016-

17. This in conjunction with new countries where they can now market their two-wheelers following the

disengagement from Honda, Hero MotoCorp hopes to achieve 10 per cent of their revenues from international

markets, and they expected to launch sales in Nigeria by end-2011 or early-2012. In addition, to cope with the new

demand over the coming half decade, the company was going to build their fourth factory in South India and their fifth

factory in Western India. There is no confirmation where the factories would be built. [13]

History

Hero MotoCorp was started in 1984 as Hero Honda Motors Ltd.[4]

1956 -- Formation of Hero Cycles in Ludhiana(majestic auto limited)

1975 -- Hero Cycles becomes largest bicycle manufacturer in India.

1983 -- Joint Collaboration Agreement with Honda Motor Co. Ltd. Japan signed Shareholders Agreement signed

1984 -- Hero Honda Motors Ltd. incorporated

1985 -- Hero Honda motorcycle CD 100 launched.

1989 -- Hero Honda motorcycle Sleek launched.

1991 -- Hero Honda motorcycle CD 100 SS launched.

1994 -- Hero Honda motorcycle Splendor launched.

1997 -- Hero Honda motorcycle Street launched.

1999 -- Hero Honda motorcycle CBZ launched.

2001 -- Hero Honda motorcycle Passion and Hero Honda Joy launched.

2002 -- Hero Honda motorcycle Dawn and Hero Honda motorcycle Ambition launched.

2003 -- Hero Honda motorcycle CD Dawn, Hero Honda motorcycle Splendor, Hero Honda motorcycle Passion

Plus and Hero Honda motorcycle Karizma launched.

2004 -- Hero Honda motorcycle Ambition 135 and Hero Honda motorcycle CBZ* launched.

2005 -- Hero Honda motorcycle Super Splendor, Hero Honda motorcycle CD Deluxe, Hero Honda motorcycle

Glamour, Hero Honda motorcycle Achiever and Hero Honda Scooter Pleasure.

2007 -- New Models of Hero Honda motorcycle Splendor NXG, New Models of Hero Honda motorcycle CD

Deluxe, New Models of Hero Honda motorcycle Passion Plus and Hero Honda motorcycle Hunk launched.

2008 -- New Models of Hero Honda motorcycles Pleasure, CBZ Xtreme, Glamour, Glamour Fi and Hero Honda

motorcycle Passion Pro launched.

2009 -- New Models of Hero Honda motorcycle Karizma:Karizma - ZMR and limited edition of Hero Honda

motorcycle Hunk launched

2010 -- New Models of Hero Honda motorcycle Splendor Pro and New Hero Honda motorcycle

Hunk and New Hero Honda Motorcycle Super Splendor launched.

2011 -- New Models of Hero Honda motorcycles Glamour, Glamour FI, CBZ Xtreme, Karizma launched.

New licensing arrangement signed between Hero and Honda.

August-- Hero and Honda part company, thus forming Hero MotoCorp and Honda moving out of the Hero Honda joint

venture. November-- Hero launched its first ever Off Road Bike Named Hero "Impulse".

Termination of Honda joint venture

Main article: Hero Honda split

In December 2010, the Board of Directors of the Hero Honda Group have decided to terminate the joint venture

between Hero Group of India and Honda of Japan in a phased manner. The Hero Group would buy out the 26%

stake of the Honda in JV Hero Honda.[14] Under the joint venture Hero Group could not export to international markets

(except Sri Lanka) and the termination would mean that Hero Group can now export. Since the beginning, the Hero

Group relied on their Japanese partner Honda for the technology in their bikes. So there are concerns that the Hero

Group might not be able to sustain the performance of the Joint Venture alone.[15]

[edit]Hero MotoCorp

The new brand identity and logo, Hero MotoCorp, was developed by the London firm Wolff Olins.[16] The logo was

revealed on 9 August 2011 in London, the day before the third test match between England and India.[16]

Hero MotoCorp can now export to Latin America, Africa and West Asia.[16] Hero is free to use any vendors for its

components instead of just Honda-approved vendors.[16]

[edit]Company performance

During the fiscal year 2008-09, the company sold 3.7 million bikes, a growth of 12% over last year. In the same year,

the company had a market share of 57% in the Indian market.[17] Hero Honda sells more two wheelers than the

second, third and fourth placed two-wheeler companies put together.[10] Hero Honda's bike Hero Honda

Splendor sells more than one million units per year.[18]

[edit]Recognition

Logo of Hero Honda, as the company was known till Aug. 2011

The Brand Trust Report [19] published by Trust Research Advisory has ranked Hero Honda in the 13th position among

the brands in India.

[edit]Motorcycle models

See also: Category:Hero Honda motorcycles

Sleek

Street

Achiever

Ambition 133, Ambition 135

CBZ , CBZ Star, CBZ Xtreme

CD 100, CD 100 SS, Hero Honda Joy, CD Dawn, CD Deluxe, CD Deluxe (Self Start)

Glamour, Glamour F.I

Hunk

Karizma , Karizma R, Karizma ZMR FI

Passion , Passion Plus, Passion Pro

Pleasure

Splendor , Splendor+, Splendor+ (Limited Edition), Super Splendor, Splendor NXG,Splendor PRO

[edit]Suppliers

It is reported Hero Honda has five joint ventures or associate companies, Munjal Showa, AG Industries , Sunbeam

Auto, Rockman Industries and Satyam Auto Components, that supply a majority of its components.[20]

After premium bikes, Hero MotoCorp actively eyeing low-cost segment

NEW DELHI, MARCH 13: 

A year after dissolving its joint venture with Honda, Hero MotoCorp is actively looking at the low-cost bike segment. This is expected to help the company further consolidate its strong hold in the domestic mass biking segment.

Low-cost bikes are typically targeted at buyers who would like to scale up from mopeds. So, the plan is to reduce prices to the Rs 20,000 —30,000 range (now it starts at Rs 34,500 for Hero's CD Dawn).

“We believe that there is a very large mass of customers in that segment — at the bottom of the pyramid. We're working on trying to come up with something, but it's not easy with the way costs are going up. But, we will have something,” Mr Pawan Munjal, Managing Director and CEO of Hero MotoCorp told Business Line.

“We'll be looking at prices which are much lower than where we currently are, otherwise it makes no sense. The market is for people who don't have any (personal) transport at all.”

PRODUCT STRATEGY

In its recently set up R&D facility and along with new technical partners — the US-based EBR, and a rumoured tie-up with Austrian power train expert AVL — the company is working on

several new product strategies. Apart from larger engines for high-end models, downsizing engines below its current starting point of 100cc is also being looked at.

Hero's increased interest in the mass segment is underlined by the fact that 88 per cent of its 4.53 million two wheeler sales (April-December 2011) came from the up to 125cc segment.

As this segment represents 70 per cent of total domestic bike sales, Hero commands a 45 per cent market share overall.

“It's easy to make something like a moped, but does that serve your purpose. A moped is not as successful in this country since it is not rugged and sturdy as per the usage our consumers — the kind of loading patterns and driving habits. We have to have a real motorcycle,” Mr Munjal said.

Industry sources said Hero had been eyeing this segment for the past few years but had been constrained from developing new technologies under the terms of its 27-year-old joint venture agreement with Honda.

That partnership formally ended in March last year, paving the way for Hero to set up its own research and development facility and seek fresh alliances.

Hero MotoCorp, AVL pair up for engine developmentIndia’s largest two-wheeler maker by volumes, Hero MotoCorp will now work with world’s largest privately

owned engine developer, AVL Engineering, to share its technology for manufacturing Hero vehicles’ engines

that would be developed in-house. “We have tied up with AVL to develop our in-house capabilities in

technologies. A team from our R&D division is already in Austria working in close coordination with AVL ITC

(Indian Technical Centre) based in Gurgaon,” said Pawan Munjal, MD & CEO, Hero MotoCorp.

The tie-up with AVL (Anstalt für Verbrennungskraftmaschinen List) is completely separate from its recent

strategic alliance with Erik Buell Racing. Hero would also improve its existing models by putting in their

learnings with the two tie-ups. AVL has earlier developed frugal workhorses for Royal Enfield andMahindra &

Mahindra. “We would be developing engines of all sizes to make new products and also refurbish the existing

product line,” added Munjal. This will surely ramp up visibility among the 11 million strong two-wheeler

consumer base in the country.

Hero also plans on working on its concept hybrid scooter showcased at the 2012 Delhi Auto Expo with the R&D

imparted from the two companies. Currently, Hero has 16 two-wheelers in the country – CD Dawn, CD Deluxe,

Pleasure, Splendor +, Splendor NXG, Passion Pro, Super Splendor, Glamour, Splendor Pro, Glamour PGM Fi,

Achiever,CBZ Xtreme, Hunk, Karizma, Karizma ZMR and its latest entry, the Impulse. The two-wheeler came

out as India’s first trans-roader and won accolades like the ‘2011 Bike of the Year’ award in the ET-ZigWheels

Car & Bike of the Year awards.

High-end bikes from Hero MotoCorp

Hero MotoCorp Ltd (HMCL) on Wednesday said it has entered into a strategic tie-up with the U.S.-based Erik Buell Racing that would help the company introduce high-end bikes in India and overseas markets.

“We are entering into a strategic partnership with Erik Buell Racing (EBR), which currently is more into high-end and high-performance racing bikes as we are completely missing in this category of motorcycles,” Hero MotoCorp Managing Director and Chief Executive Officer Pawan Munjal told journalists here. HMCL will receive support in terms of cutting-edge technology and design to develop future models from EBR, the East Troy, Wisconsin-based firm.

Is Hero MotoCorp Eyeing Ducati? – UpdatedJust a couple of weeks ago, word got out that Ducati is looking for a buyer, possibly considering Volkswagen and

BMW as potential suitors. Then a week ago, up pops Hero MotoCorp in a relationship with Erik Buell Racing, showing

they have intentions beyond the small displacement motorcycles they're currently known for. Now, in what has to be

one of the more surprising developments in all of this, word is out that Hero MotoCorp is talking to bankers about a

possible acquisition of Ducati. Wow! I guess they really are trying to expand into another market.

"We’ve been seen as a utility-bike maker, fuel-efficient bikes, and somebody who’s at the lower level of the market,

who’s more small-town and rural-market focused," said Munjal. "So our ambition is to become one of the biggest

global two- wheeler players and to do that, you cannot only be in one small segment"

This may be very preliminary and no one is going to be talking about it outside the boardrooms where the discussions

are taking place, but what is becoming clear is many more buyers may be getting into this game than everyone

initially thought.

Let's see, a company manufacturing motorcycles in Italy, with its largest market in the USA and owned by a company

in India. Would it be any different if they were owned by a company in Germany? Does any of this even matter any

more? Hero MotoCorp certainly wouldn't be the first name to pop up when you think of a Ducati sale, but it does

make you wonder who else may be interested in the Italian manufacturer.

UPDATE: In an update to their previous article, Bloomberg reports Hero has cash reserves of about $1 billion, quite

an accomplishment, considering their current range of motorcycles start at $763.

“Investors are scared about Hero’s plan of buying Ducati,” said Umesh Karne, an analyst with Brics Securities Ltd. in

Mumbai. “Hero will have to take on the burden in terms of Ducati’s debt so initially there may be some pain.”

This is going to be an interesting process to follow as the big money starts to circle Ducati. Ducati enthusiasts

probably need not worry about the company continuing with its product line, at least for the near term, since that is

the value, along with the underlying technology, that's being purchased. However, if a company like Hero is trying to

branch out and establish itself as a player in a much larger market and they are successful in their acquisition, sooner

or later, motorcycles with Ducati's technology may begin to appear with the Hero nameplate. Hero in MotoGP? Like I

said, this could get very interesting, especially as the other potential buyers begin to see new and unexpected suitors

moving in.

Hero MotoCorp unveils its new global corporate identity

The largest two wheeler producer in the country, Hero MotoCorp(formerly known as Hero Honda) has

unveiled its new global corporate identity. The new avatar of the company, not only marks the end of

26 year old pact of Munjal family and Japan’s Honda Motor but also establishes, Hero group as the

biggest sole entity in its space.

The mandate for re-designing the brand identity including the brand architecture, name, logo and

positioning has been accomplished by Wolff Olins, a global brand & innovation specialist and a part of

the Omnicom group.

The new logo of the two-wheeler major shows the letter ‘H’ in capital with a neat white background

along with ‘Hero’ written beneath in Red. The black color in the logo stands for solidity and

premiumness while the Red gives a feeling of energy, passion, and confidence.

To represent, Hero in 3D, the logo even has a triangle, trapezoid and a parallelogram in the first letter

of its name. The sharp edge of the logo depicts the style, engineering, innovation and connection with

the new brand.

Regarding the company’s new branding, Pawan Munjal, MD & CEO,Hero MotoCorp said, “Through

this we shall establish a new paradigm.”

The company’s old logo was Red in color, with an amalgamation of Hero and Honda in it.

Besides a new logo, the company has also roped in actor Ranbir Kapoor as its Brand ambassador and

has also rolled out a new anthem, composed by Oscar-winning artist, A.R Rahman. The new brand

campaign is slated to be launched on 15th August.

The company has recently bought Law & Kenneth as its creative agency on board.

With this new identity, the company aims to surpass the 10m unit’s annual sales, with a $10b turnover

in five years.

Hero MotoCorp to invest INR 1200 crore in Gujarat plant

Business Line reported that Hero MotoCorp is expected to announce plans to set up its fourth plant in Gujarat in March itself, even as talks speed up for a f i f th faci l i ty l ikely at Karnataka.

Apart from feeding growing local demand, addit ional capacity would help the two wheeler market leader to meet i ts USD 1 bi l l ion export target by 2020.

Sources close to the development said that in a deal that has already been “f inalized with the Gujarat Government,” the company is l ikely to invest about INR 1,200 crore for a two mil l ion unit capacity plant set up

over two phases.

Chosen because of the proximity to ports, the location is a 300-acre plot close to General Motors' car plant in Halol, Central Gujarat.

Mr Pawan Munjal MD & CEO of Hero MotoCorp told Business Line that “Within this month, I should be making the announcement for the new plant. I t wil l get to those levels (as Haridwar plant 's 2.5 mil l ion unit annual capacity), but wil l have modular capacit ies.”

State off icials said that for the f i f th plant expected to focus on the south Indian market, a 500 acre plot near TATA Motors' plant at Dharwad, Karnataka, has been offered by the Karnataka Government.

This comes after months of discussions that company off icials reportedly held with many States such as Tamil Nadu, Rajasthan and Himachal Pradesh

Hero MotoCorp in Talks With ‘Many’ Bankers on Possible Ducati Acquisition

Hero MotoCorp Ltd. (HMCL), India’s biggest motorcycle maker, is in talks with bankers about buying

Ducati Motor Holding SpA as it seeks technology to enhance its bikes and expand its business globally.

“Lots of people have been coming to us with Ducati: Not one banker but many bankers,” Pawan Kant

Munjal, the managing director of Hero MotoCorp, said yesterday in an interview in New Delhi. “We’re

talking to a lot of people. Not just Ducati, whoever comes to us, we talk to them.”

Hero, which in December 2010 decided to exit a 26-year partnership with Honda Motor Co. (7267), is

looking to gain technology through partnerships and acquisitions after that licensing relationship ends in

2014. The company has cash reserves of about $1 billion, Munjal said.

Investindustrial SpA, the Milan-based private-equity firm that owns Ducati, may hold an initial public

offering of the luxury-motorcycle maker in Hong Kong this year or sell it to a rival, two people familiar with

the plans said last month, declining to be identified because the plans are private. A spokesman for

Investindustrial wasn’t immediately available to comment late yesterday.

Motorcycle makers Hero and Bajaj Auto Ltd. (BJAUT) are looking to expand their markets amid increased

competition in the world’s second-biggest motorcycle market as the Indian units of Honda, Yamaha Motor

Co. and Suzuki Motor Co. expand capacity in the country. Only Chinabuys more motorcycles.

Looking Overseas

Motorcycle sales in India grew 15 percent in 2011 to 9.95 million units, according to data from the Society

of Indian Automobile Manufacturers. The industry body expects deliveries of two-wheelers, including

motorcycles and scooters, in the year beginning April 1 will increase 11 percent to 14 percent, it said Jan.

10.

Hero is looking to begin sales in Africa and Latin America this year as it tries to mimic the strategy of its

nearest domestic rival, Bajaj Auto. Bajaj sells more than 35 percent of its products overseas and expects

to exceed its export target of 1.5 million units in the year ending March 31.

Hero aims to export 1 million units annually in five or six years, Munjal said.

“We’ve been seen as a utility-bike maker, fuel-efficient bikes, and somebody who’s at the lower level of

the market, who’s more small-town and rural-market focused,” said Munjal. “So our ambition is to become

one of the biggest global two- wheeler players and to do that, you cannot only be in one small segment.”

Ducati, whose bikes are owned by actors such as Brad Pitt and Tom Cruise, was delisted in 2008 from

the Milan stock exchange.

Honda is expanding its operations in India after separating from Hero, and will spend as much as 10

billion rupees ($202 million) on its third factory near Bangalore in southern India that will be ready in 2013,

the company said in August. When complete, Honda will have a capacity to build 4 million two-wheelers

in India annually.

To contact the reporter on this story: Siddharth Philip in Mumbai at [email protected]

To contact the editor responsible for this story: Young-Sam Cho at [email protected]

Hero may export bikes from April

Expects to sell 1 million 2-wheelers abroad by 2016-17 and generate 10% of its total revenue from exports by 2020

Hero MotoCorp Ltd will start exporting scooters and motorcycles sometime in the April-June quarter this year, a year

after it broke up with Japan’s Honda Motor Co. Ltd after a 27-year-long partnership that effectively prevented it

from tapping overseas markets for its products.

“We will start exporting very soon, maybe in the first quarter of the next financial year,” Hero’s chief executive and

managing director Pawan Munjal said in an interview last week. “We have identified some distributors in Latin

America and Africa.”

Currently, Hero exports to Sri Lanka, Bangladesh, Nepal and some Latin American countries, but these account for a

very small portion of the 6.5 million vehicles it sells every year.

In 2010-11, for instance, it exported 114,581 scooters and

motorcycles, according to data from the Society of Indian

Automobile Manufacturers. According to the company, it

expects to sell one million scooters and motorcycles in

overseas markets by 2016-17, and generate $1 billion, or Rs. 5,060 crore today, (10%) of its total revenue from

exports by 2020.

A senior Hero executive, on condition of anonymity, said the firm is also identifying overseas locations for assembly

plants (factories that assemble vehicles from parts). “We’re open to set up an assembly plant if (the) volumes

justify it. There are (also) some countries where import duties are on a higher side...that may require us to

assemble locally,” he said. Typically, import duty on a complete scooter or bike is higher than that on parts.

As part of the joint venture pact between the Hero Group and Honda in 1984, Hero was not allowed to export

motorcycles to most large markets where Honda had its own assembly units. After breaking up with Honda, Hero

created a separate arm focused on export markets, Hero International Business.

The African market for two-wheelers is estimated to be one million units per year, according to Sugan Palanee,

senior regional leader and auto expert (South Africa) at consultancy Ernst and Young.

Hero will compete with Bajaj Auto Ltd in the region. Bajaj, the only Indian motorcycle manufacturer that exports to

African markets, has around a 30% market share of the entry-level motorcycle segment in the continent, while

Chinese manufacturers have the rest. In 2010-11, Bajaj exported 972,437 vehicles to markets around the world.

Hero has identified at least 50 overseas markets for its products. It will start with Africa and then move to markets

in West Asia and Latin America. “It is excited about the Latin American market, but expects lead time of at least

two years before it can enter them due to dual-fuel usage,” Jinesh Gandhi and Mansi Verma, sector analysts at

Motilal Oswal Securities Ltd, a Mumbai-based brokerage firm, wrote in a report.

Gandhi explained that the current range of Hero’s engines may not perform well in countries such as Brazil,

Argentina, Mexico and Chile that use ethanol-blended fuel.

Brazil is Latin America’s largest two-wheeler market and saw sales of at least one million scooters and motorcycles

in 2011, Gandhi said. It is also the world’s largest producer of sugar cane. Ethanol is produced in significant

quantity by the Brazilian sugar cane industry, and it is blended with petrol or diesel.

Hero won’t immediately make money from exports, the Motilal Oswal analysts said in their report. “Going by the

experience of Bajaj Auto, exports in the initial ramp-up phase could be loss-making,” they wrote.

In order to build its brand overseas, the firm also plans to be present at prominent motor shows, Munjal said. “Last

year, we were present at Milan Motor Show and this year we’ll be going to Brazil, which is also famous for

motorcycles,” he said.

A year ago in March, Hero Group bought Honda’s 26% stake in Hero Honda, now Hero MotoCorp, at half the market

value. Hero Investments Pvt. Ltd, the investment arm of Hero Group, paid Rs. 3,842 crore to buy Honda’s stake in

Hero Honda.

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Auto Expo 2012: Hero MotoCorp unveils indigenously developed Hybrid ScooterAfter launching two motorcycles and a scooter for men a couple of days ago, Hero MotoCorp on Friday unveiled India's first concept hybrid scooter at the 11th Auto Expo.

The scooter is being developed in association with a foreign consultant and is first ever series hybrid scooter from India.

We are showing the rest of the world that we have arrived," Hero MotoCorp Managing Director and Chief Executive Officer Pawan Munjal said.

The concept hybrid scooter-LEAP-indigenously developed with the help of an international consultant, he added.

Talking about the launch of the scooter, Munjal said, "we will definitely product ionise it in future. We have to work a lot for launching it commercially. So it will take sometime."

Elaborating on the technology he said, "the hybrid scooter will have an engine that gets started on the battery power comes down."

When asked about sales, Munjal said, "2012 may not be as good as 2011 but we will still see a double digit growth."

In August last year, India's largest two-wheeler maker Hero MotoCorp (formerly Hero Honda) had ended its 27 years long relationship with Honda.

Hero MotoCorp partners with US-based Erik Buell RacingHero MotoCorp formed the

partnership to bring next-generation high-end bikes to India. It will further augment R&D capabilities through multiple alliances.

Hero MotoCorp Ltd (HMCL), said it partnered with US-based Erik Buell Racing (EBR) for sharing technology. As part of the partnership, HMCL will receive support in terms of cutting-edge technology and design to develop future models from EBR - the East Troy, Wisconsin-based firm, which specializes in designing and manufacturing powerful and high-speed motorcycles.  Announcing this, Pawan Munjal, managing director and chief executive officer, Hero MotoCorp, said “It gives me immense pleasure to welcome Erik Buell to the exciting world of Hero MotoCorp. This is in keeping with my objective of quickly scaling up our own in-house R&D capabilities to a global two-wheeler technology power-house by leveraging a network of strategic international alliances. Erik and his team have been working closely with our engineers and designers to develop our next-generation range of products with cutting-edge technology and first-of-its-kind features.” Erik F Buell, chairman and CTO of EBR, said “EBR is delighted to partner with a company as iconic as Hero MotoCorp. Both HMCL and EBR share the common commitment to manufacturing world-class two-wheelers with technology of the future. I have personally been deeply impressed with and inspired by Pawan’s vision. He has given us a challenging brief, and our highly-motivated team is working towards giving shape to that dream. We look forward to designing technology solutions which are in line with contemporary global standards and also futuristic in their appeal and utility.” Through this alliance, Hero MotoCorp will also, for the first time, enter theexciting world of international motorcycle racing. The company will mark its foray into the racing arena by sponsoring two teams: Team Hero and AMSOIL Hero - a first by any Indian two-wheeler company at the AMA Pro Racing National Guard Superbikes Championship. Popular young racer Danny Eslick will represent “Team Hero” while another well-known racer Geoff May will represent team AMSOIL Hero – both riding on EBR 1190RS bikes.  Hero MotoCorp also showcased the EBR 1190RS bike at the press conference. The first race is scheduled at the Daytona Speedway, at Daytona beach, Florida, USA between 15 March 2012 and 17 March 2012. Hero MotoCorp is also developing the concept hybrid scooter called ‘Leap’, showcased at the recently-concluded Auto Expo, in collaboration with EBR.   EBR 1190RS is the flagship bike from EBR, and an exclusive engineering marvel, as the company is producing only 100 inaugural units of these, including a handful of the carbon edition package. The EBR 1190RS is taking the American motorcycle racing world by storm with its performance, styling and handling

Insider Story: How Hero Honda became Hero MotoCorphttp://www.rediff.com/business/slide-show/slide-show-1-inside-story-this-is-how-hero-honda-became-hero-motocorp/20111107.htm?print=true

On November 1, Hero MotoCorp, the new avatar of Hero Honda, announced that its dealers sold a record 650,000 motorcycles

and scooters in October.Farmers had harvested their crops, and salaried people had got Diwali bonuses; the company had no reason to complain.

Some days before that, it had declared its financial results for the quarter ended September 2011, the first full quarter without Honda as a shareholder, which showed that sale as well as profit had hit at an all-time high.For several years, the Munjals, the promoters of the company, have been known as sharp businessmen but their success was always credited to technology and innovation from Honda. The ride without Honda was the real test of their skills.The Munjals and Honda had formed Hero Honda, a 26-26 joint venture, in the late-1980s. The first sign of discord became visible over ten years ago when Honda set up a 100 per cent arm, Honda Motorcycles and Scooters India.Finally, on December 16 last year, Hero Honda informed the stock markets that the partnership was over and Honda would soon exit the company.

In the days that preceded the announcement, the Munjals had formed a core team of three people to assess if life was possible

without Honda.The team, which was kept under wraps from the rest of the world, could not go out for consumer research because that would have let the secret out.It had to rely on gut feel. What may have played on this team's mind was Honda Motorcycles and Scooters India's performance in the motorcycle market and Hero Honda's performance in the scooter market.Both had entered these markets in 2006; while Honda had got 7 per cent of the motorcycle market, Hero Honda had grabbed over 17 per cent of the scooter market which was dominated by the Honda Activa. Technology, the team concluded, was equal for all, and what really mattered to Indians was the total cost of ownership - low price tags, high fuel economy, inexpensive spares and high resale value.

On December 16, immediately after it had informed the stock markets that Honda will exit the company and before answering calls from anxious analysts and inquisitive journalists, Hero Honda Managing Director & CEO Pawan Munjal did a live webcast to all employees, vendors and dealers. The dealers were the real strength of the Munjals.Chairman and family patriarch Brijmohan Lall was on first-name terms with each of his 450 dealers, and he had made it a practice to interview all prospective dealers.The next day, the key hundred or so dealers were brought to Delhi, and the father-son duo apprised them of the situation.Within ten days, each one of the 100,000 or so mechanics and salesmen of the dealerships and the 4,000-odd touch points (service centres et cetera) were given dockets on the subject, and their questions were answered by the company's employees. Close to a year later, Hero MotoCorp claims not a single dealer left it, in spite of the doomsday projections.

And when the Munjals launched the new company name and brand identity at the O2 arena in London on August 7, the presence

of the army of dealers wasn't missed by observers.Somebody who was there says there were at least 1,000 of them. Obviously, many dealers didn't travel alone.With the dealers reassured, another core team of five was formed under Pawan Munjal to give the company a new name and a new brand identity.Though the Munjals had the option to use the Hero Honda brand till June 2014, they decided to replace it as early as possible.As it involved renewal, the project was codenamed Yajna. The team gathered about ten case studies of companies that had gone through such rebranding.

There were some international cases in the lot, though the majority was Indian. Some were success stories, others were not.

The job from here was to find the right specialist to rename the company and design a new brand, and then find an advertising agency that could convey the makeover in an effective way.In the days that followed, the Munjals sent out feelers to brand specialists from across the world. One of the go-betweens contacted Charles Wright of Wolff Ollins, an Omnicom company.Wright perhaps knew that this was no small opportunity: Hero Honda (as it was called then) was the largest Indian maker of two-wheelers.The very next day, he was in the Hero Honda office in a cramped south Delhi market (the Munjals don't move out of the market apparently because they consider it lucky for them) to meet Munjal and his brother, Sunil.

The two explained the situation to Wright - the reasons for the separation with Honda and the roadmap ahead. Many more

conversations followed.What seems to have swung the deal in Wolff Ollins's favour (there were at least three other consultants in the fray) was its work for Tata DoCoMo.The Munjals wanted the new company name and brand to reflect change with continuity as it would be unwise to let go off Hero Honda's brand equity.The brief given to Wolff Ollins was that the new name and brand should highlight Indian engineering, and signal that the company now plans to go global (earlier it could sell only in those countries where Honda was absent) and branch into new segments of the automobile market - three-wheelers, for instance.All primary data that the company had collected over the years on brand health and consumer psychographics were put at the disposal of Wright and his team of 20 drawn from the firm's offices in London, New York and Dubai.

This team, which of course included some Indians, flew to India to and interacted with the company's promoters, employees,

dealers, vendors and customers to get a feel of the brand."The research," says Wright, "showed the affection the brand has long enjoyed in the hearts of Indians and how this strong bond is born of the way a two-wheeler transforms the economic and social circumstances of the common man."By mid-year, Wolff Ollins gave its output. The name, it said, should be Hero MotoCorp - Hero to signal continuity and MotoCorp to indicate mobility, modernity and technology.It kept the door open for the company to get into segments other than two-wheelers. So far as the brand was concerned, Wolff Ollins stuck to the black and white of Hero Honda for continuity but gave it the shape of an "engineered" H: a red parallelogram with a black triangle and trapezium.The Hero next to it was in red, to signify warmth and friendliness, and all the letters were of the same size.

There were no sharp edges in the letters, which, says Hero MotoCorp Senior Vice-president (marketing and sales) Anil Dua,

reflects the Indian feel. "Together, the two stand for Indian engineering."In March, the Munjals had appointed Law & Kenneth to devise the communication strategy for the new identity. Its people were made to work with the Wolff Ollins team to (1) create ownership and reduce friction, and (2) cut the go-to-market time.The baton was now passed to it. Law & Kenneth came out with the punch line, hum main hai hero (there's a hero inside us). The Munjals liked it.They knew it had universal appeal. Everybody likes to feel that he has it in him to reach his full potential, and thus there are better times to come.The line was then passed on to lyricist Irshad Kamil to write an anthem around it. Kamil had made a name for himself with his lyrics in films like Chameli, Love Aaj Kal, Jab We Met and Ajab Prem Ki Gajab Kahani.

Once the anthem was ready, A R Rahman was contracted to set it to music and sing it as well. Rahman was in Los

Angeles where he composed the tune.An anxious Munjal went over every stanza and line with him on Skype. Once Rahman had done his job, film maker Anurag Kashyap (Dev D, Gulaal, Black Friday, That Girl in Yellow Boots et cetera) was brought on board to make a film around it.The storyboard was the achievements of ordinary people - a girl from Jharkhand who wins a medal at a gymnastics championship, a young boy who wins a dance contest et cetera.The celebrities on the company's rolls - film stars like Hrithik Roshan and cricketers like Virender Sehwag - were kept out of it, perhaps because the Munjals didn't want the message to get lost.Kashyap shot the film at various locations in India, except the shots of Rahman which were done in Los Angeles. The Munjals were now ready to roll.

They chose to unveil the new identity in London on August 7. This was done, of course, to signal that the company would now go

global; according to Dua, London was also chosen because it is a good blend of history and modernity - just the thought that the Munjals wanted to convey about their company.On August 15, Independence Day, 30 television channels were flooded with the new campaign, front page slots were bought on leading newspapers, and leading websites were roadblocked.In the days that followed, the campaign was put on 200 radio stations and 4,000 cinema halls in Tier 2 & 3 cities, and signages were changed in all the 4,500 consumer contact points like dealerships and service centres.Cleverly, the company had gone cold on all marketing and media spend for the last month and a half; this helped it conserve cash when this campaign broke.As a result, says Dua, the advertising expenditure has stayed within the average of 2-2.5 per cent for the July-September quarter.

The results, Dua claims, have been better than expected. "Our market share in motorcycles has improved from 54.5 per cent to 55.5 per cent in the last one year, and our mindshare has gone up by four percentage points after the campaign."Spontaneous brand awareness, where people are asked to name two or three motorcycle brands, Dua says, has improved from 99 per cent in the Hero Honda era to 100 per cent in the Hero MotoCorp days.These are still early days; the challenge is to sustain it in the future.

Economic Scenario

The year 2010-11 turned out to be a year of moderation, with growing trepidationacross the domains of economics, environment and

geopolitics.

If recovery was the underlying theme for the previous year, 2010-11’s summativetheme was surely uncertainty, with the massive earthquake

in Japan and turmoil in theMiddle East and North Africa (MENA) creating insecurity, along with volatility in crudeand commodity prices.

In the US, a slew of factors – double-dipping home prices; a slow recovery inlabour markets and weak wage growth; the fiscal contraction of

state and localgovernments; and underlying weakness in final demand – suggested that the subpar,anaemic recovery for the U.S. economy

might endure for a while.

Barring Germany, European recovery has almost ground to a halt. The reasons are nothard to seek: fiscal tightening in UK (a leading

economy), political uncertainty in Italy,recession in some Scandinavian countries and solvency problems in peripheral EU nations(Greece

and Turkey) contributed to the mess. Japan, which had just begun to limp back on apath of recovery, plunged back into defiation as the

impact of its natural disaster fullysank in.

To make matters worse, the growth potential in emerging markets like China, Brazil andIndia, which had demonstrated so much promise in

recent years, showed signs of gettingimpacted by monetary tightening and high interest rates.

In 2010-11, India followed a deviant growth trajectory as opposed to last year: thefastest growth was notched in the first quarter, and the

slowest was reserved for thelast. In the previous year, India began growing at a comparatively slow pace, but endedwith a strong kick. This

sparked off hope that the economy would enter the nine percentgrowth orbit. In fact, economic performance was strong throughout the first

half of thefiscal, with the manufacturing sector growing in double digits, and the service sectorgrowing almost as fast. Yet towards the

completion of the year, the growth rate dwindledto 7.8%; in the last quarter of 2010-11 it was the slowest in six quarters.

Even though the manufacturing sector notched a double-digit growth during the first twoquarters of the year, monetary tightening eventually

took its toll in the remainingquarters: it slowed down the pace of capital formation and kept growth in the index ofindustrial production in

single digits.

Nevertheless, India eventually ended the year with 8.5% growth; this was largely on theback of a strong export demand, a resurgent

agriculture sector and sustained growth inindustries like hotels, real estate, retail and banking as well as core industries, suchas cement and

steel.

Of course, the performance of the service and agriculture sector was important fordifferent reasons: the former now makes up more than

57% of national output, while 2/3 ofIndia depends on the farm sector for its livelihood.

Services and agriculture growth in turn, ensured strong demand for both consumerdurables and automobiles. However, there is little doubt

that if high interest ratespersist, they will start eating into demand and private consumption expenditure in thecoming fiscal. In fact, as the

year progressed, there was some early evidence of this inMarch 2011, with consumer durable growth shrinking to 12% from 23% in the

previous month.

In the previous annual report, fears were expressed that inflation could stifle some ofIndia’s growth impetus in 2010-11. That is exactly what

happened during the year inreview. 2010-11 began with double digit food inflation. By the time it ended,manufacturing inflation became the

source of concern: it accounted for 30% of theinflation pie in the March-July period, but in the November-March period,manufacturing’s share

of the inflation pie was up more than 55%.

This forced RBI to tighten monetary policy aggressively throughout 2010-11. The processcontinues, even at the time of writing as headline

inflation remains way above the apexbank’s comfort level.

While the near-term outlook for the Indian economy looks uncertain, India’slong-term growth prospects are stable, given the favourable

demographics and increasingconnectivity between India and Bharat. At one level, there is visible evidence ofsustainable demand emanating

from traditional rural areas. At the other, growth polesopportunities are sprouting in newly urbanised centres across the country.

Even in the short term, there is a growing perception that India may soon be on top ofits rate hike and inflation curves; in other words, as

food inflation moderates on theback of another good monsoon and as crude prices stabilise, the RBI may loosen itstightening policy towards

the end of 2011. This would have a stabilising influence ongrowth towards the end of 2011-12.

Industry and Segment Insight

A growing number of jobs in the service sector, favourable demographics, increasingurbanisation across towns and bountiful rains ensured

strong demand for two wheelers inIndia during the year in review. In combination, these factors offset continuously risingconsumer finance

rates.

The domestic two-wheeler market grew a rollicking 26%, with sales of 11.8 millionunits, compared to 9.4 million in the previous year.

Two wheeler exports grew 35%, and crossed the 1.5 million mark for the first time.Overall, two wheelers sales grew at 27% in 2010-11, with

13.4 million units of sales ascompared to 10.5 million units of sales in the previous year.

Each of the three two wheeler segments clocked strong growth. Motorcycle sales expandedby 24% from 8.4 million units to 10.5 million

units. Domestic sales made up the bulk ofmotorcycle sales. The domestic motorcycle market witnessed a growth of 23% in 2010-11,sales of

90,18,945 units as compared to sales of 73,41,090 units in 2009-10.

Continuing with a recent trend, scooter sales grew the fastest (42%) from 1.5 to 2.2million units. In the domestic market, scooters now make

up close to 18.5% of the twowheeler market. The revival in the mopeds segment continued as well; sales were up 23%from 5.7 lakh to over

7 lakh units.

India’s motorcycle market comprises three categories: entry, executive andpremium. During the year, the entry segment grew at close to

14%. Nevertheless, the entrysegment’s overall share in the two wheeler pie declined from 18.7% to 17.3%. Thedeluxe segment sustained its

steady performance, notching volumes of 4.8 million units,and a growth in excess of 15%. This segment accounted for over 62% of overall

motorcyclesales.

The show-stealer in the motorcycle category was the premium segment. More than 1.85million units were sold during the year, a growth of

66%. The strong showing ensured thatthe premium share in the overall motorcycle pie went up from 15.3% to 20.6%.

In fact in the domestic industry the premium segment outsold the entry segment for thefirst time ever.

New Product Launches

The Company has consistently relied on innovation, technology and design to sustainexcitement amongst customers.

This year saw the introduction of several new product launches and refreshes. The newproducts launches and refreshes were supported

throughout the year by impactful,clutter-breaking and engaging communication. The products which were launched are Glamour,Glamour FI,

New Hunk, Super Splendor, Splendor Pro, New Karizma

Accelerated Performance

Despite its significantly higher base vis-a-vis competitors, Company’s two-wheelersales improved by 17%; from 4.6 to 5.4 million units during

the year to garner over 40%two wheeler market share. In the domestic two wheeler market, it had a share of 44.5%,with sales of 5.2 million.

In the motorcycle segment, the Company sold over five million units. In the domesticmarket, the Company sold over 4.9 million motorcycles

at a growth of 15%, therebycapturing 54.6% domestic motorcycle market share.

In the scooter segment Pleasure, grew a whopping 65% during the year, with sales of3.42 lakh units. This single scooter brand now

accounts for over 16% market share.

Across various motorcycle segments, the Company bested industry growth in the entrysegment by growing in excess of 17%, and selling

more than 1.5 million units.

In the deluxe segment, the Company captured 68.9% share. With sales of 3.8 millionunits, the Company registered growth in excess of 12%.

Financial Scorecard

Sales

The Company’s sales grew by 17.44%. It ended the year with a domestic market shareof around 45%. The Company clocked a sales volume

of 5,402,444 units in 2010-11, comparedto 4,600,130 units in 2009-10. In value terms total sales (net of excise duty) increasedby 22.1%

to Rs. 19,245 crores from Rs. 15,758 crores in 2009-10.

Profitability

The Company’s earnings before interest depreciation and taxes (EBITDA) marginsdecreased from 17.45% in 2009-10 to 13.49% in 2010-11

and the Operating Profit (PBT beforeother income) decreased from Rs. 2,575.48 crores in 2009-10 to Rs. 2,214.61 crores in2010-11. The

margin fell despite healthy growth in the sales volume on account of higherprices of raw materials and components and additional cost of

meeting emission norms

Other Income, including non-operating income

Other income increased by 24.7% from Rs. 341 crores in 2009-10 to Rs. 425 crores in2010-11.

Cash flows

The free cash flow from operations during the year stood at Rs. 2,288.11 crores(previous year 2,686.64 crores). The same have been

deployed in capital assets,investments and paid out as dividends during the year.

Capital expenditure

During the year, the Company incurred a capital expenditure of Rs. 364.12 crores. Thefunds went into capacity expansion and replacements.

Raw material costs

Hardening of metal prices particularly steel, copper, aluminium and nickel during theyear results in escalation in material costs. Raw material

costs as a proportion of totalcost increased 68.1% to 73.3% and adversely impacted EBITDA margins.

Current asset turnover

This ratio, which shows sales as a proportion of average current assets, decreased from17.2 to 15.5 times, on account of higher average

inventory and loans and advances.

Debt structure

Hero Honda has been a debt free company for the last 10 years. The unsecured loan ofRs. 32.71 crores from the state government of

Haryana on account of sales tax deferment,is interest free and has no holding costs. Net interest payment by the Company has

beennegative during the last few years.

Dividend policy

Over the years, the Company has consistently followed a policy of paying highdividends, keeping in mind the cash-generating capacities, the

expected capital needs ofthe business and strategic considerations. For 2010-11, the Board has recommended adividend of 1750% higher

than 1500% declared in previous year, and has maintained a payoutratio of 42.1% vis-a-vis 31.3% in the previous year. Further, it has also

declared 3500%interim dividend (previous year 4000%).

Working capital management

The Company has always sought to efficiently use the various components of workingcapital cycle. It has been able to effectively control the

receivable and inventories,enabling it to continue to operate on negative working capital.

WORKING CAPITAL MANAGEMENT AND LIQUIDITY RATIOS

2010-11 2009-10

Inventory Period 10.3 10.6

Operating Cycle 12.4 13.3

Cash Cycle (20.0) (17.0)

Current Ratio* 0.40 0.45

Acid Test Ratio* 0.26 0.26

Notes on Working Capital:

The average of inventory, receivables and payables has been taken for the abovecalculations of inventory period, operating and cash cycle.

KEY INDICATORS OF PROFITABILITY (%)

2010-11 2009-10

Return On Average Capital Employed 62.3 76.4

Return On Average Equity 60.0 61.4

Profit After Tax / Income From Operations 9.9 14.1

Profit Before Tax / Income From Operations 12.8 17.9

Profit Before Interest And Tax / Income From Operations 12.8 17.7

Operating Profit Before Tax / Income From Operations 11.4 16.2

Operating Profit Before Depreciation, Interest And Tax / Income From Operations 13.5 17.4

Network Expansion

Over the last five years, more than 2000 customer touch points have been added to theCompany’s network.

Manufacturing Excellence

India’s two wheeler industry continues to benefit from an expanding economy. Arevival in agriculture, growing job opportunities in the service

sector and expandingurbanisation ensured a healthy demand for two wheelers

These factors continued to create a significant demand for the Company’s twowheelers.

Meeting this demand was a key concern during the year gone by. The challenge wassurmounted by optimising plant capacities and installing

balancing equipment not onlyinternally but across the supply chain. The team work was exceptional in overcoming thischallenge.

High speed and flexible machines were introduced to debottleneck the critical shops andlines. This was done to meet not just demand

surges, but also variability in the productmix, which decelerates the throughput. Concurrently, production of less value-added partswas

outsourced. This created space, allowed machines to be used for critical operations,and also accommodated new models and variants that

were introduced by the Company.

These initiatives helped in different ways. By the end of the year, overall productioncapacity went up and the Company was able to ramp up

from 4.6 million units to 5.4 millionunits. Over the last three years, production capacity has been augmented by over 2 millionunits.

As a part of the journey towards operational excellence, shopfloor managementprogrammes like Kanban and Kaizen were strengthened to

improve efficiency, throughputtimes and debottlenecking critical operations. At the same time, TPM (Total ProductiveMaintenance) initiatives

were beefed up across each of the three plants. Thissignificantly improved the reliability of delivery by increasing equipment uptime.

A significant enhancement in production, innovation and quality control represented thekey focus areas during the year. The result is

appreciable reduction in customercomplaints.

Over time, the Company has learnt the valuable lesson that productivity improvements atthe shopfloor would lose much of their impact if

concurrent ramp-ups were not made at thevendor’s end.

During the year, therefore, extensive attention was paid to production planning. Thereis a growing realisation about the importance of

accurate and robust long-term forecastingmodels, so that vendors are in a position to plan capacity well in advance.

At the same time, the Supply Chain team impressed upon vendors the need to build incertain flexibilities into their component supply

operations, so that they could scale ineither direction during business cycles.

The Company also invested considerable time and effort in making the direct onlinesystem (an ERP system which manages production and

supply of components across theproduction chain) more effective.

The control of in-plant manufacturing costs was another focus area. Various steps wereadopted in this direction. Gas-based generators and

heat recovery units were introduced tocut emissions and reduce electricity generation costs.

Research and Development Expertise

For 25 years, the Company’s research and development functioned and evolvedunobtrusively, but efficiently and effectively.

Over the years, the department has developed requisite infrastructure and expertise todevelop, test and approve products in-house in line

with international standards. Thedomain knowledge, acquired through the interaction with Honda R&D, made it possible toincrease the level

of customisation at the design stage itself. In turn, this has helpedin launching multi-models in short interval with high levels of localisation.

At another level, the Company’s R&D actively participates in thecountry’s environmental ecosystem. R&D members involve themselves in

theregulatory process at the outset. This ensures that all new regulation notifications arecomplied well on time (Hero’s R&D had successfully

complied with BS-III normswithin the specified time). In fact, in some cases, for example, in the case of reductionof hazardous waste, the

R&D is well ahead of the regulatory curve.

In December 2010, when the Company’s Board approved a New Licensing Arrangementbetween the two joint venture partners, it was a

watershed event. A single pen strokechanged the Company’s future and its R&D function. With Hero Honda nowre-emerging in a new

avatar, Hero MotoCorp Ltd., the organisation’s R&D is alsobeing revamped.

The facilities are being upgraded ahead of time for adoption of new technologies. Toensure that Hero MotoCorp is able to face a new world

without the presence of Honda,capabilities are being enhanced across levels. Skilled manpower is being augmentedsignificantly, and design

and validation infrastructure is being beefed up significantly.

The Company has implemented PLM (Product Lifecycle Management) and is in process ofupgrading it. At a strategic level, Hero MotoCorp’s

R&D is also exploring the newtechnical alliances to cater to the latest requirements of new products, segments andgeographies.

Information Systems

Hero MotoCorp’s robust technology heritage was strengthened further during theyear under review. IT initiatives were embarked upon at

multiple levels. There was astrong focus on supply chain integration, process efficiency and accurate and promptdecision-making.

Besides, since the time the Company had commenced its journey towards becoming a localenterprise, there was considerable emphasis in

the areas of governance and compliance.

Hero MotoCorp Connect (a Dealer Management System) aimed at automating our supplychain, enhancing information availability as well as

transparency. It has completed asuccessful year.

By the end of the financial year, the Company had successfully deployed the system atmore than 530 dealers outlets. Crossing this

milestone was no mean achievement,considering the scope and magnitude of the project. As part of the project, importantenhancements

were made in the dealers’ portal, which helped boost their integrationwith the organisation’s supply chain.

The Company also used IT infrastructure to accelerate its decision-making. Keyinitiatives included developing customised reports, using

Business Intelligence (BI). Anapplication for Cost Modelling and Analysis (CMA) was also developed during the year.

Information security and risk management was another focus area. To protect theCompany’s drawings data and prevent leakage in any form

to any unauthorised entity,its R&D processes were migrated from a mostly manual working system to a softwareapplication called Product

Lifecycle Management. The PLM software will help provide accesscontrol of critical information.

At a larger level, in order to reduce risks associated with unauthorised system access,a solution for Governance, Risk and Compliance was

implemented. At the same time, to helpthe Company keep track of all necessary statutory requirements and legal compliances,

HeroMotoCorp became one of the first companies to implement an E-compliance application tool.

During the year, the Company also accredited itself with ISO 27001 certification forInformation Security. In order to establish the credibility of

its robust securityprocesses and procedures.

Business sustainability is gaining significant importance in recent years. To de-riskbusiness operations the Company has commenced

Disaster Recovery (DR) for all criticalapplications. So far, disaster recovery has been set up for R&D, GoodLife and thedealer management

applications. Work on the SAP module and e-mail is in progress.

Meanwhile, to keep pace with changing technologies globally, the Company has alsointroduced solutions like mobile-based applications as

well as web-based interfaces forenterprise applications. For example, workflows and approvals are now possible on mobilephones.

People Approach

The emphasis has always been on building a talent pipeline taking into account amedium-to-long-term perspective. The Company has tried

to attract the right talent, buildcapabilities and facilitate career development to drive organisational objectives.

During the year, the SAP-ELS Module for Talent Development was initiated. The modulewill go live next year, and will give the new

Company a contemporary and cutting-edgetalent development system.

The Company augmented its young talent by inducting a fresh batch of managementtrainees and GETs like every year. The ET programme

has been re-engineered. Our five-monthlong induction is based on a ‘Job Function Criteria’ that recognise strengthsand facilitate appropriate

job alignment. Besides, to widen the incumbent’s learninghorizon, On-the-Job Project (OTJP) and Job Simulation were introduced for the first

time.

For mid-and junior-level management, selective education courses were introduced tofoster leadership and teamwork. As in previous years,

the Company’s mandate of’Achieving Excellence through teamwork’ was executed in various ways. Acrosslevels and locations, programmes

focusing on Strategic Thinking, People Development,Interface Management, Business Etiquette and Positive Attitude were held. Several

newprogrammes for grooming young talent were also organised.

Simultaneously, entry-level induction for workers at the plant level was strengthenedduring the year. Technical Training facilities in the

Gurukul (Company’s dedicatedtraining facility) were upgraded; new machines were brought in and a mini assembly linewas set up to provide

new inductees with hands-on experience in vehicle assembly.

At another level, a new programme was introduced for plant employees to fulfil theirspiritual needs. The programme (Sadbhavna) has been

commenced at the ’Om ShantiRetreat Centre in association with Brahma Kumaris, a well-known spiritual organisation.Close to 900 operators

were covered under the programme during the year.

During the year, the Code of Conduct was launched to embed and codify the ethicaltenets of the Company.

On its part, the Top Management team underwent the Harvard Business School Programme on"Building a Global Enterprise in India".

Employee and industrial relations scenario at all three plants remained smooth duringthe year under review. At Dharuhera, union elections

were held peacefully, and a new Unioncame into force.

To track and manage the performance of the contractors (who provide manpower)efficiently, a Performance Matrix was introduced for the

first time in the contractagreements. The matrix was directly linked to the service charges of the contractors.During the year, biometric cards

for the Gurgaon region were issued by the ESIauthorities.

Risk Management

Inflation and input prices

India’s core inflation has gone up significantly over the past year, and isunlikely to moderate significantly in the coming months. This is an

area of considerableconcern as the bulk of the Company’s production costs comprise material costs.However, the Company continues to

proactively focus on cost optimisation to offset thespiralling rise in material prices.

Interest rates

Sustained inflation forced India’s apex bank to tighten monetary policy throughoutthe year in review, and this process continues into the

current year. While the Companyhas not been significantly affected by higher interest because of its strong balance sheetand healthy cash

flows, some of its smaller vendors of the Company could face expansionconstraints if the cost of finance continue to remain high. The

Company is now pursuing anaggressive policy of multiple sourcing to counter this challenge.

Global uncertainty

Global uncertainty didn’t significantly affect past performance as theCompany’s operations were mostly concentrated in domestic markets.

With wideningtranscontinental footprint, the susceptibility to geo-political events can escalatesignificantly. However, considering the

Company’s product profile, and planned focuson emerging and nascent markets similar to India, the management believes the challenge

ofuncertainty can be overcome.

Transition challenges

Undergoing major transformation following the change in ownership, the Company is inthe process of acquiring a new identity for itself and

its products. Although the Companycan use the Hero Honda brand till 2014, it is aware that it has to eventually create a newbrand

association among customers without Honda. Moreover, it will have to contend withstrong competition from its erstwhile joint venture partner

across all major segments.Admittedly, there will be challenges in the near term, yet the Company believes it issuitably positioned to

capitalise on the market reputation created over a period of 26years. To succeed in the new dispensation, the R&D function has witnessed a

majoroverhaul with a focus on new product development. New alliances and technology tie-ups arealso being finalised. In addition, new

export markets are being explored.

Green Management

The Company’s environmental consciousness – embedded in the credo "wecare’’ – continued to be a key area of focus.

Since inception, the Company has invested substantially in clean and greentechnologies: a fluidised bed (for paint hanger burning), an

advanced incinerator (forpaint and sludge), solid landfill (for the disposal of solid, hazardous and non-hazardouswaste), effluent and sewage

treatment plants, rain water harvesting sites (referencesites), Green Roof (at Hardwar plant) and others.

The Green Vendor Development Programme has struck deep roots since its commencement in2007. This collaborative programme calls for

partner companies to demonstrate theircommitment towards improved environmental performance and striving for continualimprovement.

Six pillars have been assigned under the programme, covering various aspects, such asenergy management, water management, waste

minimisation, pollution prevention,substitution of hazardous chemicals and environmental compliance management. Partnervendors are

given specific training on all six pillars. Process mapping is conducted toidentify different non-compliances and projects are undertaken for

implementation. Thisprogramme is gaining increasing acceptability among vendors. In the first year, projectswere undertaken with around 30

vendors; by the end of the financial year more than 90vendors were enrolled.

MUMBAI, OCT 19: In order to cater to the growing demand for fuel-efficient two wheelers in a tough economic climate, market leader Hero MotoCorp is increasing output of its three plants in North India to around 7 million units by March, 2012.

A new fourth plant, previously expected to come up in the later part of this fiscal in South India, is now likely be commissioned by the second half of 2012-13. Around Rs 500 crore is expected to be invested in this new plant with a 1.5 million annual capacity over a phased manner.

“We’re working on de-bottlenecking and expanding our plants … they will work on three shifts from next year. After a couple of quarters we may have 7 million plus capacity. We’re producing 8,000 a day at Haridwar - the plan is to take this to 9,500 a day over the next 6 months,” Mr Ravi Sud, CFO, Hero MotoCorp said during an investor call on Wednesday.

“The fourth plant is expected to be commissioned by the third quarter or the beginning of the fourth quarter of next fiscal,” he added. With the new plant plans pushed back, the capital expenditure target for 2011-12 has been reduced to Rs 600 crore from Rs 900 crore.

At present, Hero MotoCorp has an installed annual production capacity of 6.1 million units across its three plants in Gurgaon, Dharuhera and Haridwar. Though last year it produced 5.4 million units, this year production has already being taken up to 6.4 million units a year.

“Our view is that the slowdown in auto sales, because of a global impact, will get resolved over the next few months. Two wheelers have been less impacted and rural is compensating the dip in urban sales - from 38 per cent in 2009, rural is now more than 46 per cent of our sales,” Mr Sud.

He added that commodities prices, which are now stabilising, are expected to come down over the next few months on a drop in demand from the US and Europe.

Global plans

As for its international plans, the two wheeler maker has shortlisted some “potential partners” for possible assembly and distribution. New markets where it has a “good understanding” include Latin America, Africa and South-east Asia. It is now preparing a roadmap for an entry strategy.

Hero MotoCorp shares at the BSE were up 4.13 per cent at Rs 2,066.90 on Wednesday

Hero company overview

The Hero Group structure has three cornerstones through which it has contributed to Indian Industry i.e.,

Automotive Manufacturing, Services Businesses and the Auto-Ancillary Businesses.

The flagship company in the automotive manufacturing sector is Hero MotoCorp Ltd. (Formerly Hero Honda Motors

Ltd.,). The new "Hero" is rising and is poised to shine on the global arena. Company's new identity "Hero

MotoCorp Ltd." is truly reflective of its vision to strengthen focus on mobility, technology and creating global

footprint. Building and promoting new brand identity will be central to all its initiatives, utilizing every opportunity

and leveraging its strong presence across sports, entertainment and ground- level activation.

Hero MotoCorp two wheelers are manufactured across three globally benchmarked manufacturing facilities. Two of

these are based at Gurgaon and Dharuhera which are located in the state of Haryana in northern India. The third

and the latest manufacturing plant is based at Haridwar, in the hill state of Uttrakhand.

The Services Businesses of the Hero Group are managed by Hero Corporate Service Limited which is the holding

company for all the services businesses for the group. Hero Corporate Service Limited manages the Real Estate,

Financial Services, Information Technology Enabled Services, Consulting & Advisory, Integrated Learning &

Education businesses.

The Hero group also owns a large Auto ancillary company called Rockman Cycles Limited which supplies auto

components to both the Hero Automotive businesses as well as leading auto makers in India and overseas.

About hero

Home > The Hero Group > Group Businesses Structure > Hero MotoCorp  

Hero MotoCorpHero MotoCorp Ltd. (Formerly Hero Honda Motors Ltd.) is the world's largest manufacturer of two - wheelers, based in India. In 2001, the company achieved the coveted position of being the largest two-wheeler manufacturing company in India and also, the 'World No.1' two-wheeler company in terms of unit volume sales in a calendar year. Hero MotoCorp Ltd. continues to maintain this position till date.

The story of Hero MotoCorp Ltd. began with a simple vision - the vision of a mobile and an empowered India, powered by its bikes. Hero MotoCorp Ltd. company's new identity, reflects its commitment towards providing world class mobility solutions with renewed focus on expanding company's footprint in the global arena.

Hero MotoCorp's mission is to become a global enterprise fulfilling its customers' needs and aspirations for mobility, setting benchmarks in technology, styling and quality so that it converts its customers into its brand advocates. The company will provide an engaging environment for its people to perform to their true potential. It will continue its focus on value creation and enduring relationships with its partners.

Hero MotoCorp's key strategies are to build a

Hero MotoCorp, in its endeavor to remain a pioneer in technology, will continue to innovate and develop cutting edge products and processes.

Hero MotoCorp offers wide range of two wheeler products that include motorcycles and scooters, and has set the industry standards across all the market segments. Hero MotoCorp's product range includes successful models that have redefined the Indian two-wheeler market: Karizma, Hunk, CBZ Xtreme, Achiever, Super Splendor, Glamour Fi, Splendor+, Splendor NXG, Passion Plus, CD Deluxe and CD Dawn, and the scooter Pleasure.

The Company's growth in the two wheeler market in India is the result of an intrinsic ability to increase reach in new geographies and growth markets. Hero MotoCorp's extensive sales and service network now spans over to 5000 customer touch points. These comprise a mix of authorized dealerships, service and spare parts outlets and dealer-appointed outlets across the country.

robust product portfolio across categories, explore growth opportunities globally, continuously improve its operational efficiency, aggressively expand its reach to customers, continue to invest in brand building activities and ensure customer and shareholder delight. Hero MotoCorp two wheelers are manufactured across three globally benchmarked manufacturing facilities. Two of these are based at Gurgaon and Dharuhera which are located in the state of Haryana in northern India. The third and the latest manufacturing plant is based at Haridwar, in the hill state of Uttrakhand.

In the 1980's the Company pioneered the introduction of fuel-efficient, environment friendly four-stroke motorcycles in the country. It became the first company to launch the Fuel Injection (Fi) technology in Indian motorcycles, with the launch of the Glamour-Fi in June 2006.

Its plants use world class equipment and processes and have become a benchmark in leanness and productivity.

The new Hero is rising and is poised to shine on the global arena. Company's new identity "Hero MotoCorp Ltd." is truly reflective of its vision to strengthen focus on mobility and technology and creating global footprint. Building and promoting new brand identity will be central to all its initiatives, utilizing every opportunity and leveraging its strong presence across sports, entertainment and ground- level activation.

Hero MotoCorp and its brands have consistently received awards and recognitions at various forums. The company pioneering efforts in the two-wheeler industry have also been acknowledged by various entities. Mr. Pawan Munjal, MD & CEO of the company was recently awarded the "CNBC TV18 Overdrive Man of the Year Award". The company also recently won three coveted awards - "The Most preferred Brand of two-wheelers" award at the CNBC Awaaz Consumer Awards 2008, and the "NDTV Profit Business Leadership Award" for two-wheelers.

Home > The Hero Group > Group Businesses Structure > Corporate Services

Corporate ServicesHero Corporate Service Limited (HCSL) is an India-based privately held company that provides services related to manufacturing, consulting, and IT-Enabled services. The Company has it’s headquarter in New Delhi. A subsidiary of the $5.1 billion Hero Group provides the knowledge and research services to companies and corporates within the group. After its formal inauguration on February 9, 1995, Hero Corporate Service was converted into a Limited Company in September 1995.

HCSL comprises of seven strategic-business units. They are the Hero Mindmine Institute Limited (HMIL), HeroBPO (India), HeroTSC (United Kingdom), NsurePlus, Arrow Infra Limited (AIL), Hero Realty & Infra Limited (HRIL) and Abhyuday Manufacturing and Automotive Limited (AMAL). The aim of forming Hero Corporate Service Limited was to deliver outstanding services and products by utilizing the advantages and experience of the Hero Group. The company has a strong foundation of highly-experienced professionals, quality systems, tested procedures and business philosophies.

HCSL undertakes planning and execution of projects for the group & its ancillaries through the "Strategy & Planning Cell (SPP)" of the division. The SPP cell works on diverse expansion and growth programmes that may involve the setup of Greenfield projects, Business Process Re-engineering, Change Management and Product Development, within the Hero Group. The Strategy & Planning cell is completely focused on achieving the company’s objectives and dedicated to identify, evaluate and select opportunities for the group, to plan and implement selected projects &

Mr. Sunil Kant Munjal is a senior member of the Hero

Group and is responsible for developing growth

strategy and implementation of new business plans

for the Group. He was selected by "India Today" –

India’s largest English newsmagazine, as one of the

"Faces of the Millennium" for business. He is also a

member of the family that owns the Hero Group. He

is the Joint Managing Director of Hero MotoCorp Ltd.,

the world’s largest motorcycle manufacturing

company, and Chairman of Hero Corporate Service

Limited, the Corporate Office for the Hero Group. He

is also Chairman of HeroTSC, amongst the largest

BPO/Call Centre companies in the United Kingdom

and Managing Director of Hero Steels. Mr. Munjal is

the President of the Dayanand Medical College and

Hospital, Ludhiana (one of North India’s largest

hospital-cum-medical colleges). He is also the

President of the Ludhiana Sanskritik Samagam, an

organization that promotes performing arts across

North India. In addition, Mr. Munjal is involved in a

number of other social and philanthropic activities.

Mr. Sunil Kant Munjal has also been the President of

Confederation of Indian Industry (CII). He is also on

the Board of Indian School of Business, Hyderabad

and is the visiting faculty at various Business Schools

and Corporate. His specialization is in Business

Studies and Holistic Management Practices. Apart

from the above he is a member of Prime Minister's

Council on Trade and Industry, Consultative Group on

Industry, Planning Commission, Government of India

and SEBI Committee on Disclosures. He has made

significant contributions to some of the National-level

Economic and Labour reforms in India in the capacity

of Chairman or as a member. Mr. Munjal is the

founder supporter of Munjal Global Manufacturing

Institute (MGMI) which is being setup at Indian School

of Business, Mohali. The Munjal Global Manufacturing

Institute is being setup with the intent of promoting

research and educational excellence in diverse areas.

The Institute will also focus on operational excellence

& customer orientation along the supply chain and

across the organization with emphasis on leadership,

team work and problem solving.

opportunities and to create a resource base that would interact with existing group companies providing analysis to support decision-making and implementation. HCSL’s areas of services also include finance & treasury, human resource and total-quality management. The tested and well-planned process of understanding the business needs of the clients has been a key to the success of HCSL. This is undertaken by conducting in-depth research on the emerging technologies, products and applying them to meet the customers’ requirements. With its wide-spread expertise, the team at “Hero” provides a wide range of client-specific services and solutions that are competitive as well as affordable.

With Dr. Brij Mohan Lall Munjal as the Group Chairman, the $5.1 billion Hero Group is led by a first generation business entrepreneur of the 1950s'. After the India-Pakistan partition, the Munjal brothers started a small business manufacturing bicycle components in Ludhiana in North India.

Hero Corporate Service Limited‘s vision is to

"become a quality supplier of services to

enhance capabilities of Hero Group Companies

and others based on an ethical and holistic

view of management".

Home > The Hero Group > Group Businesses Structure > Auto Ancillaries

Auto AncillariesFrom a humble effort to localize Bicycle Chains and Hubs in early 1960’s to World’s Largest Producer and now to a leading Supplier of Aluminum Die Casting, Machined and Painted Assemblies, the journey so far has been full of growth and full of passion for excellence.

Today, Rockman Industries are one of leading suppliers in Aluminum Die Casting, Machined and Painted Assemblies to Hero MotoCorp Ltd. (Formerly Hero Honda Motors Limited) - the Largest Manufacturer of Two Wheelers in the World. Besides being Customer Centric, a company has to keep innovating, facilitating change, adopting World – Class Manufacturing and Management Practices.

We at Rockman Industries are always striving for better and challenging conventions to exceed our customer’s expectations in terms of quality, cost, development and delivery.

Rockman Industries has witnessed a very sharp growth in volume and revenue in last 5 years. Our biggest strength to achieve this rapid growth has been a unique work culture always willing to learn and proactively contribute towards common goal of achieving excellence and high level of customer satisfaction.

Rockman Industries is also one of largest

With 9 years of experience in High Pressure Die Casting,

Rockman Industries has developed in-house expertise in this

field. Not only, Rockman Industries have developed systems for

handling multiple alloys, but have mastered the art of large

scale mass production. Rockman Industries produces over

30,000 die cast components / day from machines ranging from

150T to 800T locking force capacity. The HPDC machines are

fully automatic with real-time controls to ensure uniform quality.

Customer’s quality requirements are continuously increasing

and become demanding as well. A pressure-tight casting free

from pores is the order of the day. Rockman Industries has the

experience and expertise in such castings.

Rockman Industries has the required expertise in processes,

ability to offer creative solutions; always meeting the timeline

and offering the entire range of services have made us what we

are today.

Rockman Industries is ISO TS 16949 Certified by TUV to

testify the total commitment to quality and processes. Producing

critical safety components and assemblies for instance braking

systems are somewhat complex and demands very high-degree

of industry good practices. To ensure the compliance with

customers’ requirement; every employee is aware of its

responsibilities and is committed to towards achieving the goal

of "Zero Defects". 

Total employee involvement in delivering the highest quality

products is achieved by encouraging employees to participate

in Quality Circles, Kaizen Activities and Suggestion

Schemes.

suppliers of Drive Chains and Timing Chain to Hero MotoCorp Ltd.,

Rockman Industries produces chains as per International Standards like 420, 428.

With 9 years of experience in High Pressure Die Casting, Rockman Industries has developed in-house expertise in this field. Not only, Rockman Industries have developed systems for handling multiple alloys, but have mastered the art of large scale mass production.

Hero motor corp

Hero MotoCorp Ltd. (Formerly Hero Honda Motors Ltd.) is the world's largest manufacturer of two - wheelers, based in India. 

In 2001, the company achieved the coveted position of being the largest two-wheeler manufacturing companyin India and also,

the 'World No.1' two-wheeler company in terms of unit volume sales in a calendar year. Hero MotoCorp Ltd. continues to maintain

this position till date. 

VISION

The story of Hero Honda began with a simple vision - the vision of a mobile and an empowered India, powered by its bikes. Hero

MotoCorp Ltd., company's new identity, reflects its commitment towards providing world class mobility solutions with renewed focus

on expanding company's footprint in the global arena. 

MISSION

Hero MotoCorp's mission is to become a global enterprise fulfilling its customers' needs and aspirations for mobility, setting

benchmarks in technology, styling and quality so that it converts its customers into its brand advocates. The company will provide an

engaging environment for its people to perform to their true potential. It will continue its focus on value creation and enduring

relationships with its partners. 

STRATEGY

Hero MotoCorp's key strategies are to build a robust product portfolio across categories, explore growth opportunities globally,

continuously improve its operational efficiency, aggressively expand its reach to customers, continue to invest in brand building

activities and ensure customer and shareholder delight.

MANUFACTURING

hero MotoCorp two wheelers are manufactured across three globally benchmarked manufacturing facilities. Two of these are based at Gurgaon and Dharuhera which are located in the state of Haryana in northern India. The third and the latest manufacturing plant is based at Haridwar, in the hill state of Uttrakhand.

TECHNOLOGY

in the 1980's the Company pioneered the introduction of fuel-efficient, environment friendly four-stroke motorcycles in the country. It became the first company to launch the Fuel Injection (FI) technology in Indian motorcycles, with the launch of theGlamour FI in June 2006. 

Its plants use world class equipment and processes and have become a benchmark in leanness and productivity.

Hero MotoCorp, in its endeavor to remain a pioneer in technology, will continue to innovate and develop cutting edge products and processes

2010-2011 performance

Total unit sales of 54,02,444 two-wheelers, growth of 17.44 per centTotal net operating income of Rs. 19401.15 Crores, growth of 22.32 per centNet profit after tax at Rs. 1927.90 Crores Total dividend of 5250% or Rs. 105 per share including Interin Dividend of Rs. 70 per share on face value of each share of Rs. 2 eachEBIDTA margin for the year 13.49 per centEPS of Rs. 96.54