Twenty years ago at the India Gate C-Hexagon, Pawan Munjal and his father, Brijmohan Lall Munjal, stood before the assembled media corps to celebrate the rollout of the 10 millionth motorcycle from Hero Honda. A decade later, in 2011, a visibly emotional Brijmohan Lall was speaking to the media at the rooftop of the Taj Mansingh hotel announcing the divorce of Hero and Honda.
While analysts and journalists believed that Honda gave Hero a pretty good settlement at the time, Pawan Munjal, who was running the company by now, was determined not to become a footnote in Indian corporate history. He knew that their erstwhile partner, the Japanese major Honda which might have parted on good terms, wanted nothing less than to dominate the Indian market. Bajaj Auto and TVS Motors, the two rivals of Hero Honda, had been left in the dust in India but had found major success in Africa, South America and Southeast Asia. Even today, if you visit countries in Africa or South America, you will be surprised to see the number of vehicles wearing the Bajaj or TVS names. But Hero was hobbled as Honda was already a global company and other than neighbouring countries and Colombia for some bizarre reason, Hero was not allowed to export anywhere else.
Not that it should have mattered — the Indian market for commuter motorcycles and scooters was expanding rapidly in the early 2010s. Hero’s tremendous reach into every nook and cranny of the country made them a market leader impossible to dethrone. But Munjal, in a conversation with me at the time, realised one thing: if Hero was to continue to grow in India, it would need to become a global company. He needed technology, products and, importantly, a brand. It wasn’t surprising, therefore, that in late 2011, Hero launched their new corporate identity with their seemingly patented Bollywood song and dance routine at the O2 Arena in London.
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Hero’s welcome in a changing world
Hero was in a hurry. Executives from the company that still operated from small buildings in Delhi’s Basant Lok complex (Hero shifted their headquarters only after Brijmohan Lall passed away in 2015) were scouring the world for potential partners, both to sell and produce products. But India was still home and Munjal knew that his biggest weakness compared to his domestic rivals was the lack of a research and development hub. Therefore, thousands of crores of rupees were poured into the Hero Centre for Innovation and Technology (CIT) at Kukas in the outskirts of Jaipur, Rajasthan. Top technologists and engineers were hired from around the world. Munjal remained determined to take the company to the next level.
But the world was changing, not just politically in India but also when it came to propulsion. Small battery-powered cycles and then scooters were a growing market in China. As the prices of fuel at the pump increased, rechargeable batteries for two-wheelers made economic sense as running costs were a small fraction of petrol power. These were written off as an inconvenience to the three large players, but the electric two-wheelers from China could redefine the market, not just in India but worldwide.
As the majors, including Hero, were seemingly caught flat-footed, not knowing what to do, a bevy of start-ups emerged to break their stranglehold on the Indian market. Some were even familiar to Pawan Munjal and Hero MotoCorp, and to give credit to Munjal, he realised this change and invested in a small company called Ather Energy. Today, Ather is known as a leader in the electric scooter space in India and Hero MotoCorp is the largest shareholder in that company.
As for Hero MotoCorp, they were slow off the ball. Like a cricket batter waiting to open the innings, Hero played and missed ball after ball. Dozens of small competitors sprung up to take down Hero, much like Lilliput tied down Gulliver, buoyed by generous government subsidies even though many of these firms were just assembling Chinese kits. Others like Ather and Ola Electric were a bit more serious, actually developing their own technology. Even Bajaj Auto and TVS Motors had tentatively dipped their toes into the market. But everyone wanted to know what Pawan Munjal and Hero would do. The launch of Hero’s electric product had been delayed time and again, thanks to shortages of batteries and semiconductors and, some suspected, an unsuitable product.
Under a dome painted like the earth on the lawns of CIT this past Friday, Pawan Munjal finally played his hand. He had already announced that the brand would be called ‘Vida’ (pronounced ‘Veeda’ as in Spanish for ‘Life’) a few months ago (the Hero brand cannot be used for electric two-wheelers due to a dispute with Hero Electric, a firm run by another arm of the Munjal clan). But the Vida V1, as the brand’s first electric scooter would be called, was a surprise. Unlike its rivals from their major rivals, it has batteries that can be removed and charged at home. Munjal clarified that the batteries adhered to all the AIS standards for battery safety. The company has already tied up with Bharat Petroleum and Hindustan Petroleum to establish a network of charging stations across the country and will share their charging network with Ather.
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Eyeing not just India, but the world too
Munjal is adamant that he did not want to launch a half-finished product. Vida’s marketing line is that it has built India’s ‘Not First’ electric two-wheeler. And while Vida V1 is pricey — its two variants cost Rs 1.45 lakh and Rs 1.59 lakh, pricier than competing products from Ather and Ola — a news item that appeared on the morning of the launch could suddenly upend the market. An audit by the Automotive Research Association of India (ARAI) found that several start-ups in the electric two-wheeler space, including Hero Electric, are not eligible for central government subsidies for electric vehicles because they didn’t fulfil the requirement of manufacturing their products with at least 50 percent components sourced locally in India. According to industry insiders, though, this was bound to happen.
Munjal believes that the product offering from Vida, the highest range in class, attractive financing schemes and an assured buyback after 16-18 months of usage as well as the Hero brand, should still entice customers to buy the Vida V1 although the product is only going on sale in Bengaluru, Delhi and Jaipur on 10 October with deliveries coming mid-December 2022. “Eight more cities will be added to the network by mid-December,” Munjal said, and added that Vida would leverage Hero’s extensive dealership network. “Dealers are our greatest strength.”
Importantly, Munjal pointed out that the Vida V1 was not just a product for India, “Our plans to export the Vida V1 are not long-term but short-term, we will start exporting this to Bangladesh, Colombia and even Europe within a year.”
Munjal might have been late to the game, but he knows that none of his rivals, even the newer ones, are anywhere near export ready. In fact, the plans that Vida would go global are evident in the brand name—Vida is a highly recognised Spanish word, the language of South America and even spoken in English- and French-speaking parts of Africa. And with the V1 and future products, the second electric scooter with a swappable battery which will utilise Hero’s partnership with Taiwanese battery-swapping leader Gogoro and even an electric motorcycle, are already in the works.
If you have read the story, you know that the Lilliputians could not tie down Gulliver forever, he humoured them for a bit. Hero is the Gulliver in this story and it has risen up—only this time, it plans to dominate not just India but the world as well.
@kushanmitra is an automotive journalist based in New Delhi. Views are personal.
(Edited by Prashant)
Source: The Print
