Munjals to invest $1b in Hero MotoCorp
LONDON: Hero MotoCorp, the new company formed by the Indian promoters of Hero Honda, the Munjals, said on Tuesday that they intend to invest $1 billion in five years to generate a turnover of $10 billion.
Addressing the media in O2 Arena in London, Pawan Munjal, MD and CEO of Hero MotoCorp, said the investment is equal to the amount invested by the company in the past 27 years. The Munjals had split with Japanese partner Honda in December 2010 after buying their 26% stake in Hero Honda for nearly $850 million.
The company has now been renamed Hero Moto-Corp with a new logo,"One World One Hero". Wolff Olins, part of the Omnicom group, worked on the new brand identity, including the brand architecture, brand name, brand logo and brand positioning. The company is also using the services of Law & Kenneth (L&K) to communicate and launch the brand.
Munjal said that the company will target annual sales of 10 million units in next five years and an annual turnover of $10 billion with exports contributing to 10% of the turnover. "The company has already identified 30 countries as 'low hanging fruits' in Latin America, Africa and South East Asia," Munjal said.
"We are looking at all kind of options in these overseas markets that include acquisition or acquiring minority stakes in the existing companies or setting up new manufacturing facilities". Under the joint venture agreement with Honda, the company was prevented from entering major export markets and could only export to neighbours such as Sri Lanka and Bangladesh.
Hero may also sign a technology collaboration pact with either a European or a Japanese major. Hero MotoCorp has clocked sales of more than 500,000 units every month between March and June this year. It has guided for over six million units in the financial year (April-March) of 2011-12.
Hero's 6.15-million capacity units is located at Dharuhera and Gurgaon in Haryana and at Haridwar in Uttarakhand. In a global brand and logo unveiling ceremony anchored by Bollywood biggy Shahrukh Khan, the company announced launch of two new two-wheelers aimed at targetting the youth.
The company launched a 110 cc scooter - Maestro for the Indian market and a 150 cc onroad-off-road motorcycle Impluse. The company has also appointed
Ranbir Kapoor as its brand ambassador.
Source:
Munjals to invest $1b in Hero MotoCorp - The Economic Times
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From the ongoing expenditures such as brand identity, hunting for R&D personnel, etc. it was apparent that the Munjals were and still are very serious in making a successful business out of Hero Honda.
But money is not going to cut everything. Bajaj are in the motorcycle business for more than 10 years now, and still they face stiff competition and complaints.
Hero Group is so far known for its reliability and durability, and the new products will find it very difficult to keep up to the legacy, unless they are tried and trusted already...
That's why we can see Hero Group doing some serious shopping with a big open wallet.
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08-10-2011, 09:05 PM
Munjals to invest $1b in Hero MotoCorp. Also, 2 Indian Products launched.
