Can Hero Motocorp Ltd.

Continue to be the Leader in TwoWheeler Market in India

Authors:
1. Prof. M.P. Singh, Associate Professor, VNS Business School, Bhopal (M.P.),
email: mpsinghrewa@gmail.com
2. Prof. Arun Mishra, Assistant Professor, VNS Business School, Bhopal (M.P.),
email: arunjimishra@gmail.com
Introduction:
Hero Motocorp Ltd., formerly Hero Honda, is an Indian motorcycle and scooter
manufacturer. Hero Honda started in 1984 as a joint venture between Hero Cycles of India
and Honda of Japan. The company is the largest two wheeler manufacturer in India. The 2006
Forbes 200 most respected companies list has Hero Honda Motors ranked at no. 108. In 2010
Honda decided to move out of the joint venture and in August 2011 the company was
renamed Hero MotoCorp with a new corporate identity.
During the 80s, Hero Honda became the first company in India to prove that it was possible
to drive a vehicle without polluting the roads. The company introduced new generation
motorcycles that set industry benchmarks for fuel thrift and low emission. A legendary 'Fill it
- Shut it - Forget it' campaign captured the imagination of commuters across India, and Hero
Honda sold millions of bikes purely on the commitment of increased mileage.
Hero Honda became the first company in the country to introduce four-stroke motorcycles
and set the standards for fuel efficiency, pollution control and quality. It has an excellent
distribution and service network spread throughout the country.
The company has a stated aim of achieving revenues of $10 billion and volumes of 10 million
two-wheelers by 201617. Hero MotoCorp is aiming to achieve 10 per cent of their revenues
from international markets. 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.
Current Scenario:
Hero is leading the India two wheeler markets with 48% share and a renowned name in
commuter bikes. Even though Heros biggest strength is its highest market share in entry
level bikes (100 cc to 125 cc), the market of Hero MotoCorps most successful 2 wheeler
bike Splendor is shrinking by 20% in the FY 2012-13 as per statistic available from Society
of Indian Automobile Manufacture (SIAM). Quarter ended in Dec. 2012 resulted in lowest
net margin in the 15 years history of Hero. This is because since March 2011 sales has
declined and cost increased tremendously due to heavy expanses on re-branding exercise and
advertising after separation from Honda.

Source: Chouhan C. P. (2013, May 28). Hero MotoCorp: Can the two-wheeler brand stay on top while
Honda and Bajaj Auto claw into its market share? Economic Times

To know the pulse of youth toward company products, Mr. Pawan Munjal MD & CEO of
Hero MotoCorp met youngster at some place in New Delhi after interaction he could realize
youth demands for trendier and power bike these days.
As per industry experts Hero MotoCorp doesnt carry weight without Honda. In order to deal
with the challenge Hero has recently rolled out the unprecedented five-year warranty beyond
the industry norms of three years. Hero Motocorp is beginning to draw blue print for Heros
life after Honda and investing the vast resource available with the group on technology upgradation, repositioning their products and going global. R&D center at Kukas Rajasthan is
on the priority list of the group as per information available. This is because Mr. Munjal very
well understands that technology can only make inroad for acceptance of their products
demanded by youth in India. With growing competition and availability of variety of
products, youth has understood that they have the bargaining power to chose products
available with various companies.
At global end Hondas presence in 150 countries can give toughest time for Hero therefore
Mr. Munjal is doing mind boggling exercise with industry expert to understand the intricacy
involved with export step suggested by experts. Where Mr. Munjal has to take decision are
related to understanding customer needs and market demand of countries where export can be
done. As per organization insider Central American countries like Guatemala, El Salvador
and Honduras are identified, where Hero Motocorp will partner with local Indy Motor Group
for strategically and promotional campaign Value for Money export on these countries will
also need to understand pricing strategy, distribution network and Honda factor.

Future Challenges for Hero MotoCorp down the line

Broader
Identity
beyond
Seeding R&D
Create
Commuter
Own
Bike
Identity
Beyond
Crack Honda
Fire Up Sales
Overseas
Markets

Questions for discussion:

1. Do the SWOT analysis of Hero MotoCorp after getting separated from Honda.
2. As Honda is giving tough competition to Hero, What strategy according to you Hero
should adapt to face the competition?
3. As Honda is world leader with presence in 150 countries. Do you think Hero
MotoCorp will get benefited by entering into Overseas Market?
4. As a marketer suggest strategies to overcome the upcoming challenges given in the
case.
Reference:
Chouhan C. P. (2013, May 28). Hero MotoCorp: Can the two-wheeler brand stay on top
while Honda and Bajaj Auto claw into its market share?. Economic Times, pp. 16.
II. http://info.shine.com/company/Hero-Honda-Motors-Limited/800.aspx, visited on May 31st,
2013 at 1.30 pm.
III. http://www.heromotocorp.com/en-in/aboutus/thecompany, visited on June 6th, 2013 at 3.40
pm.
I.