Analysis: What is Hero MotoCorp up to, really?
It started in November 2013 when Hero rolled out 15 products on to the stage at their pre-Diwali announcement. Then came thepre-Auto Expo event that showed off another five products. A day or two later, Hero had more releases in store at the Auto Expo itself showing between four and six products each on both of the press days. That is a quite a volume of things to show, a lot of stuff to talk about. In there are fuel cell and electric two-wheelers, diesel two-wheelers, superbikes, racebikes, streetbikes, scooters small and big. It's a bewildering range of things that Hero has been hammering out over the past four or five months. What is, really, underneath all that, going on?
The history of the brewing war
When Hero and Honda went their separate ways, it was a gigantic seismic event in our two-wheeler industry. The equivalent of an earthquake that smashed all the continents together and created a new world leaving only Australia and some parts of Africa intact. In that one announcement, the whole dynamic of the Indian motorcycle and scooter business changed irrevocably.
Together Hero Honda and HMSI more or less owned two-thirds of the Indian market. Separately, they were destined to become bitter rivals. Hero had the bigger market share and Honda had the perpetual will to have 51 per cent of the market. Honda had the smaller network but a huge research and development operation that could churn out products, though not rapidly. Hero had unparalleled reach and a marketing and sales operation that was the envy of the industry, moving volumes at a scale that still has no real rival on the face of the Earth.
Both the companies set out down their natural paths. Honda had to fill out its product range and grow its network to ensure it reached all the 51 per cent of potential Indian customers - no easy task in a country as large as ours.
Hero, on the other hand, had perhaps the harder task ahead of it. It possessed the biggest, most effective product pipeline in the business with nothing to fill the pipeline with in effect.
Hero begins to build its arsenal
If the evolution of Hero MotoCorp sounds like a reactionary movement to Honda's aggressive pursuit of marketshare growth, that's actually only a part of the picture. Hero MotoCorp was born on the foundation of immense cash reserves, huge manufacturing capacity and the intense desire to stay where they had been for a long, long time - as the volume leaders of one of the largest two-wheeler markets in the world. That drive has nothing to do with Honda, though the Japanese are the closest to upsetting the Hero applecart.
Hero immediately put their immense cash to work, constructing a functioning R&D department that could handle the full product lifecycle, rather than the earlier operation which was smaller in size and constrained contractually to relatively minor development work until this point. Hero rapidly tied up with Engines Engineering, AVL and Erik Buell Racing (EBR) to accelerate the technical development of R&D and to have experienced brains in the product development process.
It was EBR that helped Hero birth the Leap series hybrid scooter for the 2012 Auto Expo, their first 'product' as an independent oufit. As I noted a long time ago, Hero was the largest player in our market as well as its newest. Not an easy position to occupy.
The first salvos are fired
Hero has been hard at work since. They announced at the Diwali announcement that they were constructing a huge R&D facility and if you look back at Hero MotoCorp's messages since they began life, it's all been focussed on how Hero was marching ahead on the technology front. How they were working out the biggest chink in their armour.
Pawan Munjal with the repertoire of new Hero bikes
What we have seen from Diwali till now, at the Auto Expo, is an extraordinary show of force. It's almost as if Hero's showing us three or four years worth of products in the space of a few months. Which is actually what Hero has done. Pawan Munjal went up on stage and put expected launch dates on more or less everything they showed at the Auto Expo and everything at the pre-Diwali announcement was anyway launch or ready-to-launch products.
This, even at face value, has great importance. It instills confidence in their dealers about the future. Which is critical because Honda isn't sprouting hundreds of showrooms out of thin air in India, they're hoovering up showroom staff from all the other manufacturers and persuading as many dealers as possible to join their network. Hero needs to retain its ability to reach customers if it is to keep its lead.
The importance of technology in the war
On the other hand, the importance of technology isn't lost on Hero. Trouble is two fold. First, you can't really bring new technology into the entry-level market - the prices and slim margins do not allow it. Second, the upper reaches of our market have never been very favourable to Hero in the past.
But as Pawan Munjal likes to remind journalists, Hero MotoCorp doesn't wear the shackles Hero Honda had to. It can play in whichever part of the market it likes, make product plans without interference and sell these wherever in the world it likes.
And that, despite the long path we've taken to get here brings us to the product onslaught. If you actually look at what's been shown you'll see a startling pattern. All the stuff being rolled out now isn't earth shattering technological leaps forward. The bottom of Hero's ranges gets minor tweaks, lots of cosmetic updates and in some cases, like the HF Eco, it's more hyperbole than real.
The 2014 Hero HF-Deluxe Eco
The only two real technology elements are the integrated braking system that should appear soon and the start-stop system that we're expecting to test on the Splendor iSmart shortly. Neither is groundbreaking and cynics would say they just bought the stuff off AVL or Engines Engineering. But the process of technology acquisition isn't, on its own, worthy of criticism. Why reinvent the wheel? But both suggest that Hero's fledgling R&D and Hero's technology associates are comfortable with moving forward, even if it is one step at a time.
The rest of the stuff is mostly promises. The fuel cell and electric concepts are almost de riguer for any company willing to stand up and showcase it's technology. Are they running prototypes with actual fuel cell motors or working electrical propulsion? I'd be very surprised if they were. But they serve a very specific purpose for which a design exercise is enough. Will Hero invent a fuel-cell based propulsion system or for that matter a full electric powertrain? That would be stupid and time-consuming. It's far quicker to just acquire the rights to these kinds of technologies from other people who've already finished developing these into street-ready states.
The plan ahead
On the other hand, the HX250R, Zir, Dash, Dare etc are far more real. They're likely to be out and about soon. But if the Zir is slotted only for, say September 2015, so it has to be about halfway through its development cycle. The 125cc Dash is closer but when I went to straighten its handlebar for a photograph, I realised that it was very much a show prototype.
Hero HX250R and the Dash scooter
But all of these models have a role to play in Hero's message. They say that Hero is going to attack every part of the market. They won't launch 65 products one day but over the next two-three years, there will be a Hero MotoCorp product in every segment. There will be scooters, motorcycles and through EBR, there may be mid-weights like the Hastur as well as, eventually, full on superbikes like the EBR1190RS and RX.
If you think of Hero as a company that only began life three-four years ago, the Auto Expo blitz says Hero's busy making up lost ground on companies that have existed, developed, launched and sold products for a much, much longer time. They want to be the school monitor despite being in the third grade. They're doing what appears to me the only logical way to operate when you have momentum and yet, need to create it as well.
I met Pawan Munjal at the end of the Diwali announcement bonanza and he seemed tired. Tired in the same way that driven individuals are when their brains won't allow their bodies to rest. But he smiled and said that this was a new challenge for him. A challenge that was a lot more personal than ever before and he was determined to keep Hero where he believes it belongs - at the very top.
Hero understands that it has a battle of profound proportion ahead of it. Where its smaller machines will have to bring the numbers and the bigger ones will have to bring the profits. Where it will battle Honda and the other manufacturers for every inch of space in our market. It is easy to be cynical and dismiss their forthcoming products - some of their designs were clearly less mature than a product leader's should be.
But it's making the right moves and the right noises. It intends to take the fight to a global giant with a reputation for winning and dominating. Over the next two years, what lies ahead is a slew of products that will tell us how well Hero's technological development is going and whether it can bring credible products to market or not.
Showing roughly 33 products - some ready and others forthcoming - in the space of six-odd months is no mean feat. But retaining their market leadership isn't going be a small task either. You just have to remember that Hero isn't making empty promises either. Now that Munjal has put in place a launch schedule, all of these products have to come to market, ideally on time. It was probably not unplanned but the ball is now in Hero R&D's court and now they have to start delivering. Deliver products that excite you and me. Products that their dealers can sell. Products that sustain Hero's momentum. It began in November 2013 and no one can tell you where it will end.