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Hero Group forms 12-member team to explore foreign markets
28 Mar, 2011, 05.55AM IST, Lijee Philip & Chanchal Pal Chauhan,ET Bureau
MUMBAI/NEW DELHI: The Hero Group, promoted by the BM Munjal family, has formed a 12-member team to chalk out strategies to boost two wheeler exports, signalling its quest to transform Hero Honda into a global company competing with rivals, including its 27-year-old Japanese partner Honda Motor Company which has recently agreed for a divorce . The joint venture pact barred Hero Honda from exporting two wheelers to countries where Honda sells bikes and scooters.
Anil Dua, the head of marketing and senior vice-president of Hero Honda, heads the team that has a mandate to evolve strategies for branding, resource allocation for exports and identify potential overseas markets. The internal team has drawn expertise from crucial departments such as human resources, research & development, branding, logistics and finance. Hero Honda's HR head Anandi Pandey, R&D head Harjeet Singh are part of the cross-functional team.
"A dedicated cross-functional team has been set up with the mandate to work on a range of subjects with regard to export opportunities. While domestic market in India will continue to be our main focus, we will also actively try to increase our footprints in new overseas markets," said Hero Honda CEO & MD Pawan Munjal. The Hero Group has bought a 26% stake in the joint venture from Honda on March 22 and a formal announcement of the break-up may happen before March 31.
Honda's four representatives on the Hero Honda board, including the joint managing director Toshiaki Nakagawa, will resign shortly, paving the way for the inclusion of the second generation BM Munjal family members. The internal think tank will outline broad directions, helping the company to appoint a head for the exports business which accounts for only 2% of its total sales. Hero Honda, which plans to set up overseas ventures to assemble its bikes and scooters in foreign locations, will focus on places such as north Africa and Latin America which is fast emerging as developing markets for the two-wheelers , said a senior Hero Honda official.
India's biggest motorcycle company's domestic, Japanese and Chinese rivals have entered these markets, targeting customers with rising disposable incomes. Honda Motor Company plans to build and sell two wheelers for as little as $599 in Latin America and Nigeria for low-income groups as demand for two-wheelers dwindles in developed markets such as Japan and the US. Hero Honda's new export strategy will shape up after the company completes its re-branding exercise. The Hero Group has appointed branding and innovation specialist Wolff Olins to develop a new brand identity. The New Delhi-based company plans to remove the Honda branding from its flagship motorcycle brand the Splendor and the Passion from June 2011. These bikes will be marketed as standalone products in the overseas markets. "The work on developing a new brand identity has been progressing in full earnest," said Munjal.
Hero Honda is also revamping the operations of its dealers as it faces declining market share in premium products. India's largest motorcycle maker has asked its dealers to set up special team for premium customers . The company is also training dealers to provide better treatment for premium customers. In the higher margin premium segment, Hero Honda's market share declined from 34% in FY09 to 29% in FY10 and to 27% in the first nine months, according to data compiled by the Society for Indian Automobile Manufacturers or SIAM. "Hero Honda will have to maintain its edge on the technical front if it wanted to maintain its leadership in Indian two-wheeler market. Without Honda they can source technology commercially but that needs to be robust enough to meet the tough conditions in Indian landscape," said Mahantesh Sabard, an auto analyst with Mumbai-based Fortune Brokerage.
Source : Hero Group forms 12-member team to explore foreign markets - The Economic Times
MUMBAI/NEW DELHI: The Hero Group, promoted by the BM Munjal family, has formed a 12-member team to chalk out strategies to boost two wheeler exports, signalling its quest to transform Hero Honda into a global company competing with rivals, including its 27-year-old Japanese partner Honda Motor Company which has recently agreed for a divorce . The joint venture pact barred Hero Honda from exporting two wheelers to countries where Honda sells bikes and scooters.
Anil Dua, the head of marketing and senior vice-president of Hero Honda, heads the team that has a mandate to evolve strategies for branding, resource allocation for exports and identify potential overseas markets. The internal team has drawn expertise from crucial departments such as human resources, research & development, branding, logistics and finance. Hero Honda's HR head Anandi Pandey, R&D head Harjeet Singh are part of the cross-functional team.
"A dedicated cross-functional team has been set up with the mandate to work on a range of subjects with regard to export opportunities. While domestic market in India will continue to be our main focus, we will also actively try to increase our footprints in new overseas markets," said Hero Honda CEO & MD Pawan Munjal. The Hero Group has bought a 26% stake in the joint venture from Honda on March 22 and a formal announcement of the break-up may happen before March 31.
Honda's four representatives on the Hero Honda board, including the joint managing director Toshiaki Nakagawa, will resign shortly, paving the way for the inclusion of the second generation BM Munjal family members. The internal think tank will outline broad directions, helping the company to appoint a head for the exports business which accounts for only 2% of its total sales. Hero Honda, which plans to set up overseas ventures to assemble its bikes and scooters in foreign locations, will focus on places such as north Africa and Latin America which is fast emerging as developing markets for the two-wheelers , said a senior Hero Honda official.
India's biggest motorcycle company's domestic, Japanese and Chinese rivals have entered these markets, targeting customers with rising disposable incomes. Honda Motor Company plans to build and sell two wheelers for as little as $599 in Latin America and Nigeria for low-income groups as demand for two-wheelers dwindles in developed markets such as Japan and the US. Hero Honda's new export strategy will shape up after the company completes its re-branding exercise. The Hero Group has appointed branding and innovation specialist Wolff Olins to develop a new brand identity. The New Delhi-based company plans to remove the Honda branding from its flagship motorcycle brand the Splendor and the Passion from June 2011. These bikes will be marketed as standalone products in the overseas markets. "The work on developing a new brand identity has been progressing in full earnest," said Munjal.
Hero Honda is also revamping the operations of its dealers as it faces declining market share in premium products. India's largest motorcycle maker has asked its dealers to set up special team for premium customers . The company is also training dealers to provide better treatment for premium customers. In the higher margin premium segment, Hero Honda's market share declined from 34% in FY09 to 29% in FY10 and to 27% in the first nine months, according to data compiled by the Society for Indian Automobile Manufacturers or SIAM. "Hero Honda will have to maintain its edge on the technical front if it wanted to maintain its leadership in Indian two-wheeler market. Without Honda they can source technology commercially but that needs to be robust enough to meet the tough conditions in Indian landscape," said Mahantesh Sabard, an auto analyst with Mumbai-based Fortune Brokerage.
Source : Hero Group forms 12-member team to explore foreign markets - The Economic Times
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