11/1/2012

Hero Motocorp |

HERO GROUP

Overview
The Hero Group structure has three cornerstones through which it has
contributed to Indian Industry i.e., Automotive Manufacturing, Services
Businesses and the Auto-Ancillary Businesses.
The flagship company in the automotive manufacturing sector is
Hero MotoCorp Ltd. (Formerly Hero Honda Motors Ltd.,). The new "Hero"
is rising and is poised to shine on the global arena. Company's new identity
"Hero MotoCorp Ltd." is truly reflective of its vision to strengthen focus on
mobility, technology and creating global footprint. Building and promoting
new brand identity will be central to all its initiatives, utilizing every
opportunity and leveraging its strong presence across sports, entertainment
and ground- level activation.
Hero MotoCorp two wheelers are manufactured across three
globally benchmarked manufacturing facilities. Two of these are based at
Gurgaon and Dharuhera which are located in the state of Haryana in northern
India. The third and the latest manufacturing plant is based at Haridwar, in
the hill state of Uttrakhand.
The Services Businesses of the Hero Group are managed by Hero
Corporate Service Limited which is the holding company for all the services
businesses for the group. Hero Corporate Service Limited manages the Real
Estate, Financial Services, Information Technology Enabled Services,
Consulting & Advisory, Integrated Learning & Education businesses.
The Hero group also owns a large Auto ancillary company called
Rockman Cycles Limited which supplies auto components to both the Hero
Automotive businesses as well as leading auto makers in India and overseas.

History
Hero group was established by the four Munjal brothers namely Satyanand
Munjal, Om Prakash Munjal. Late Dayanand Munjal and Late RamanKant
Munjal. The brothers hailed from a small town called Kamalia, now in
Pakistan. The brothers established a business of bicycle spare parts in the
year 1944 in Amritsar.
After partition and independence of India, the brothers moved to
Ludhiana and started a bicycle unit called Hero Cycles in 1956. By 1975,
Hero cycles became the largest bicycle manufacturer in India .In 1986 Hero
Cycles Limited entered the Guinness Books of World Records as the largest
bicycle manufacturer in the world.
India has the largest number of two wheelers in the world
with 41.6 million vehicles. India has a mix of 30 percent automobiles
and 70 percent two wheelers in the country. India was the second largest
two wheeler manufacturer in the world starting in the 1950s with the
birth of Automobile Products of India (API) that manufactured scooters.
API manufactured the Lambrettas
But, another company, Bajaj Auto Ltd. surpassed API and
remained through the turn of the century from its association with
Piaggio of Italy (manufacturer of Vespa scooters). The license raj that
existed between the 1940s to 1980s in India did not allow foreign
companies to enter the market and imports were tightly controlled. This
regulatory maze, before the economic liberalization, made business
easier for local players to have a sellers market. Customers in India
were forced to wait 12 years to buy a scooter from Bajaj. The CEO of
Bajaj commented that he did not need a marketing department, only a
dispatch department.

By the year 1990, Bajaj had a waiting list that was twenty-six
times its annual output for scooters. The motorcycle segment had the
same long wait times with three manufacturers: Royal Enfield, Ideal
Jawa, and Escorts. Royal Enfield made a 350cc Bullet with the only
four-stroke engine at that time and took the higher end of the market but
there was little competition for their customers. Ideal Jawa and Escorts
took the middle and lower end of the market respectively.
In the mid-1980s, the Indian government regulations changed
and permitted foreign companies to enter the Indian market through
minority joint ventures.In 1984, Hero group joined Honda Motors of
Japan to create Hero Honda Motors Limited .Hero Honda is worlds
third largest two wheeler maker and it became the world's largest
manufacturer of two-wheelers with over 48% market share in India.. The
2006 Forbes 200 Most Respected companies list has Hero Honda
Motors ranked at #108. The Brand Trust Report published by Trust
Research Advisory has ranked Hero Honda in the 13th position among
the brands in India. In year 2006,Hero Honda entered the scooter
production with launch of its new model -Pleasure .
The two-wheeler market changed with four Indo-Japanese
joint ventures: Hero Honda, TVS Suzuki, Bajaj Kawasaki and Kinetic
Motor Company (Kinetic Honda). The entry of these foreign companies
changed the Indian market dynamics from the supply side to the demand
side.
In Dec 2010, when Honda decided to move out of the joint
venture, Hero Group bought the shares held by Honda. Subsequently, in
August 2011 the company was renamed Hero MotoCorp with a new
corporate identity. The new brand identity and logo of Hero MotoCorp
were developed by the British firm Wolff Olins. The logo was revealed
on 9 August 2011 in London .On June 4, 2012,Hero Motocorp approved
a proposal to merge the investment arm of its parent Hero Investment
Pvt. Ltd. into the automaker. The decision comes after 18 months of its
split from Honda Motors.
Company Profile
Hero is the brand name used by the Munjal brothers for their flagship
company, Hero Cycles Ltd. A joint venture between the Hero Group and
Honda Motor Company was established in 1984 as the Hero Honda
Motors Limited at Dharuhera, India. Munjal family and Honda group both
owned 26% stake in the Company. It is reported Hero Honda has five joint
ventures or associate companies, Munjal Showa, AG Industries, Sunbeam
Auto, Rockman Industries and Satyam Auto Components, that supply a
majority of its components.
During the 1980s, the company introduced motorcycles that
were popular in India for their fuel economy and low cost. A popular
advertising campaign based on the slogan 'Fill it - Shut it - Forget it' that
emphasised the motorcycle's fuel efficiency helped the company grow at
a double-digit pace since inception. The technology in the bikes of Hero
Honda for almost 26 years (19842010) has come from the Japanese
counterpart Honda
Today every second motorcycle sold in the country is a
Hero Honda. Every 30 seconds, someone in India buys Hero Honda's top
-selling motorcycle - Splendor. Hero Honda bikes currently roll out from
two globally benchmarked manufacturing facilities based at Dharuhera
and Gurgaon in Haryana. These plants together are capable of churning
out 3.9 million bikes per year. A third state of the art manufacturing
facility at Hardwar in Uttranchal will soon be commissioned to cope with
sustained customer demand. Hero Honda's extensive sales and service
network now spans over 3000 customer touch points.
These comprise a mix of dealerships, service and spare
points, spare parts stockists and authorized representatives of dealers
located across different geographies. Hero Honda values its relationship
with customers. Its unique CRM initiative - Hero Honda Passport
Program, one of the largest programs of this kind in the world, has over
3 million members on its roster. The program has not only helped Hero
Honda understand its customers and deliver value at different price
points, but has also created a loyal community of brand ambassadors.
The company has a stated aim of achieving revenues of
$10 billion and volumes of 10 million two-wheelers by 201617. This in
conjunction with new countries where they can now market their two-
wheelers following the disengagement from Honda., The company was
going to build their fourth factory in South India and their fifth factory in
Western India.
During the fiscal year 2008-09, the company sold 3.7
million bikes, a growth of 12% over last year. In the same year, the
company had a market share of 57% in the Indian market. Hero Honda
sells more two wheelers than the second, third and fourth placed two-
wheeler companies put together.Hero Honda's bike Hero Honda Splendor
sells more than one million units per year. On 1st June 2012, Hero
MotoCorp reported its highest ever monthly sales at 5,56,644 units in
May, registering a growth of 11.28%.
Growth-
Hero Honda experienced great growth throughout its early days. The
Munjal family started a modest business of bicycle components. By
2002 Hero Group had sold 86 million bicycles producing 16000 bicycles
a day. Today Hero Honda has an assembly line of nine different models
of motorcycles available. It holds the record for most popular bike in the
world by sales for Its Splendor model. Hero Honda Motors Limited was
established in joint venture with Honda Motors of Japan in 1984, to
manufacture motorcycles. It is currently the largest producer of Two
Wheelers in the world. It sold 3 million bikes in the year 2005-2006.
Recently it has also entered in scooter manufacturing, with its model
PLEASURE mainly aimed at girls. HUNK is the latest offering from the
HHML stable.
Just-in-Time Manufacturing-
The Hero Group through the Hero Cycles Division uses just-in-time
manufacturing. The Group boasts of superb operational efficiencies.
Every assembly line worker operates two machines simultaneously to
save time and improve productivity. The fact that most of the machines
are either developed or fabricated in-house, has resulted in low inventory
levels. In Hero Cycles Limited, the just-in-time inventory principle has
been working since the beginning of production in the unit. This is the
Japanese style of production. In India, Hero is probably the only
company to have mastered the art of the just-in-time inventory principle
Ancillarisation-
An integral part of the Group strategy of doing business differently was
providing support to ancillary units. There are over 300 ancillary units
today, whose production is dedicated to Hero's requirements and also a
large number of other vendors, which include some of the better known
companies in the automotive segment.
Labor relations-
In Hero Group there is no organized labor union and family members of
employees find ready employment within Hero. The philosophy with
regard to labor management is "Hero is growing, grow with Hero." Hero
workers receive a uniform allowance, as well as House Rent Allowance
(HRA) and Leave Travel Allowance (LTA). Extra benefits include
medical check-ups not just for workers, but also for the immediate
family members. For the majority of the production workers, who are
hired through contractors, these benefits are out of reach. This and other
problems lead to a strike and factory occupation by 4,000 temp workers
in the Gurgaon plant in spring 2006.
Criticism-
There is a frequent complaint that the biking enthusiasts in India make in
many Auto-related forums which is related to Hero Honda not making
serious efforts to upgrade its models as frequently as its competitors like
Yamaha,Bajaj and TVS. Many bike enthusiasts in India feel that Hero
Honda only upgrades the "stickers" along with the names of its
bikes.'Sticker' upgrading can be easily noticed by observing the technical
specifications of the models Splendor, Splendor Plus, Passion, Passion
Plus, Karizma, Karizma R
Another frequent complaint made by Bike enthusiasts is that Hero
Honda has too many bike models with exactly same or similar engines
despite of the company claiming that it caters to 'all segments'. While
Bajaj rolls out new models with many improvements, there have been
very less new or feature-upgraded models from Hero Honda.The latest
bike from Hero Honda is Hunk which again has an engine more or less
similar to CBZ-Xtreme and now Yamaha has launched two new bikes
YFZ-R15 and FZ16 to compete with Hero Honda and Bajaj.




Models
1956-Formation of Hero Cycles in Ludhiana(majestic auto limited)
1975-Hero Cycles becomes largest bicycle manufacturer in India.
1983-Joint Collaboration Agreement with Honda Motor Co. Ltd. Japan
1984-Hero Honda Motors Ltd. incorporated
1985-Hero Honda motorcycle CD 100 launched.
1989-Hero Honda motorcycle Sleek launched.
1991-Hero Honda motorcycle CD 100 SS launched.
1994 - Hero Honda motorcycle Splendor launched.
1997-Hero Honda motorcycle Street launched.
1999 - Hero Honda motorcycle CBZ launched.
2001 - Hero Honda motorcycle Passion and Hero Honda Joy launched.
2002-Hero Honda motorcycle Dawn and Hero Honda motorcycle .
Ambition launched
2003-Hero Honda motorcycle CD Dawn, Hero Honda motorcycle
Splendor, Hero Honda motorcycle Passion Plus and Hero Honda
motorcycle Karizma launched.
2004-Hero Honda motorcycle Ambition 135 and Hero Honda
motorcycle CBZ* launched.


2005-Hero Honda motorcycle Super Splendor, Hero Honda
motorcycle CD Deluxe, Hero Honda motorcycle Glamour,
Hero Honda motorcycle Achiever and Hero Honda Scooter
Pleasure.

2007 - New Models of Hero Honda motorcycle Splendor NXG, New
Models of Hero Honda motorcycle CD Deluxe, New Models of
Hero Honda motorcycle Passion Plus and Hero Honda
motorcycle Hunk launched

2008-New Models of Hero Honda motorcycles Pleasure, CBZ Xtreme,
Glamour, Glamour Fi and Hero Honda motorcycle Passion Pro
as launched

2009-New Models of Hero Honda motorcycle Karizma:Karizma
ZMR and limited edition of Hero Honda motorcycle Hunk
Launched




2010-New Models of Hero Honda motorcycle Splendor Pro and
New Hero Honda motorcycle Hunk and New Hero Honda
Motorcycle Super Splendor launched.

2011- New Models of Hero Honda motorcycles Glamour, Glamour FI,
CBZ Xtreme, Karizma launched.
New licensing arrangement signed between Hero and Honda. In
August Hero and Honda parted company, thus forming Hero
MotoCorp and Honda moving out of the Hero Honda joint
venture.
In November, Hero launched its first ever Off Road Bike Named
Hero "Impulse".

2012-New Models of Hero Motocorp Maestro the Musculine scooter
and Ignitor the young generation bike are launched



Traded as BSE: 500182
NSE: HEROMOTOCO
BSE SENSEX Constituent
Industry Automotive
Founded January 19, 1984
Founder(s) Brijmohan Lall Munjal
Headquarters New Delhi, India
Area served India, Sri Lanka
Key people Brijmohan Lall Munjal (Chairman)
Pawan Munjal (MD & CEO)
Products Motorcycles, Scooters, Three-Wheeler
vehicles
Revenue 235.7903 billion (US$4.46 billion)
Operating
income
25.9707 billion (US$490.85 million)(FY
20102011)
Net income 23.7813 billion (US$449.47
million)(2011)
Parent Hero Group
Website www.heromotocorp.com
MANAGEMENT
S.No Name Designation
1 Brijmohan Lall Munjal Chairman
3 Pawan Munjal Managing Director
2 Ilam C Kamboj Company Secretary
4 Suman Kant Munjal Non Executive Director
5 Paul Edgerley Non Executive Director
6 Sunil Kant Munjal Joint Managing Director
7 Pradeep Dinodia Non Executive & Independent Director
8 Pritam Singh Non Executive & Independent Director
9 Anand C Burman Non Executive & Independent Director
10 V P Malik Non Executive & Independent Director
11 M Damodaran Non Executive & Independent Director
12 Ravi Nath Non Executive & Independent Director

Bankers-
ABN Amro Bank, Bank of America, Bank of Tokyo
Mitsubishi , Canara Bank , Citi Bank, HDFC Bank, HSBC Bank, ICICI
Bank, Punjab National Bank, Standard Chartered Bank




"Trust and relating to people are the cornerstones of our
business philosophy. In whatever we do, we try to keep our
promises, and with whoever we partner, we focus on the long
term. Irrespective of what we do, we follow these two simple
rules "
Brij Mohan Lall Munjal
Chairman,
Hero Group




Milestones Hero Group-






Mr Brijmohan lall
munjal



Mr. Brijmohan lall Munjal is the founder
Director and Chairman of the Company and the
$3.2 billion Hero Group. He is the Past
President of Confederation of Indian Industry
(CII), Society of Indian Automobile
Manufacturers (SIAM) and was a Member of
the Board of the Country's Central Bank
(Reserve Bank of India). In recognition of his
contribution to industry, Mr. Munjal was
conferred the Padma Bhushan Award by the
Union Government. Mr. Munjal is currently on
the board of the following Public Limited
Companies:

Dr. Brijmohan Lall Munjal is currently on
the board of the following Public Limited
companies:


No. Name of Company Nature of Office
1
Hero MotoCorp. Ltd. Chairman and Whole-
time Director
2
Hero FinCorp Ltd. Chairman
3
Easy Bill Limited Director
4
Hero InvestCorp
Limited
Director
5
Munjal Showa
Limited
Director
6
Rockman Industries
Ltd.
Director
7 Shivam Autotech Limited Director
8 Survam Infrastructure
Ltd.
Director



Mr. Pawan Munjal

Mr. Pawan Munjal is the Managing Director and CEO
of the Company. He is responsible for growth and strategic
planning for the entire Group. A graduate in Mechanical
Engineering, Mr. Munjal has been instrumental in bringing
about technological and managerial excellence in the
Company's operations. He has been the Chairman of
several Committees of CII.
He is also on the board of Indian Institute of Management,
Lucknow and Indian School of Business. An avid golfer,
Mr. Munjal is Past Chairman of the Asian PGA Tour
Board of Directors and the Past President of Professional
Golfers Association of India (PGAI). Under his guidance,
Hero MotoCorp launched the Hero Indian Sports Academy
(HISA) in collaboration with Laureus Foundation to
provide equal opportunities in sports to various
communities and to reward talent in the country.

Mr. Pawan Munjal is currently on the board of the
following Public Limited Companies:


No.
Name of Company Nature of Office
1 Hero MotoCorp Ltd. Managing Director & CEO
2 Hero FinCorp Ltd. Director
3 Hero InvestCorp Limited Director
4 Hero Realty & Infra Limited Director
5 Rockman Industries Limited Director

"Don't dream if you can't fulfill your dreams''
Brijmohan Lall Munjal is often fond of saying.
The founder and patriarch of the $3.2 billion
Hero Group is your classic first generation
entrepreneur. He is a man who started small,
dreamt big and used a combination of grit and
perseverance to create one of the country's largest
corporate groups and the World's No.1 Two
Wheeler Company.

Instinctive from a young age, Brijmohan Lall made a rather unusual start
in life. Around the time when the freedom movement in India was taking
shape in the late 1920s, he walked into a newly opened Gurukul (Indian
heritage school) near his home in Kamalia (now in Pakistan). He was only
six years old then.

Thus began an extraordinary tale of courage and perseverance. Brijmohan
began his business story after partition in 1947, when he and his brothers
relocated to Ludhiana. The family set up a company that provided poor
people with basic transport (cycles). Three decades later, as India evolved,
he added a second crucial chapter - which visualized affordable and
technologically superior transport to millions of middle class Indians. The
rest is history.

Building Relationships-
When Brijmohan and his brothers started out, there was no concept of
organized dealer networks. Companies just produced, and most dealers
functioned like traders. Brijmohan changed the rules of the business by
trusting his gut instincts; introducing business norms that were ahead of
their time, and by investing in strategic relationships. Brijmohan built a
series of bonds and networks with hundreds of family members, vendors,
dealers and employees. Much like the Japanese keiretsu system, these
networks are now the glue that holds the Hero Group together.

"Thanks to the relationships that we have nurtured so passionately in the
Hero Family, the younger generations of some of our bicycle dealers have
become dealers of Hero MotoCorp. These relationships have survived
through generations - through bad times and good times'' the patriarch now
reminiscences.

Besides bonding with his vendors and dealers, Brijmohan has been
personally responsible for kindling a spirit of entrepreneurship amongst his
employees, and today, 40 of his former employees are successful
entrepreneurs.

Staying Ahead-
Though not technically qualified in the conventional sense, few of his
contemporaries have understood the dynamics of technology better than
Brijmohan Lall has. He could always visualize the applicability of
technology before others could. For example, in the 1980s, when all two-
wheeler companies in India opted for two-stroke engine technology,
Brijmohan preferred a four-stroke engine - a technology that dramatically
increased fuel efficiency and reduced maintenance costs. This technology
was one of the biggest reasons for Hero MotoCorp's stupendous success.

A Corporate Citizen-
A frugal upbringing and a value system modeled on the famous Gurukul
system - which stresses the sanctity of the teacher-pupil relationship -
imbibed in Brijmohan a strong sense of social commitment and
responsibility.

There is a special place in his heart for Ludhiana, the city where he took
roots. Today, Ludhiana is a modern, bustling city, but Brijmohan has
played no mean role in its evolution. Several schools and educational
institutions in Ludhiana owe their existence to the Munjal family.

The Ludhiana Stock Exchange owes its existence to Brijmohan's vision as
does the Ludhiana Flying Club. He's also set up the not-for-profit
Dayanand Medical College and Hospital-an institute now rated as one of
the best medical colleges in India, in terms of infrastructure, quality of
staff and alumni profile.

In and around Dharuhera, near the first Hero MotoCorp plant, Brijmohan
and his family have left their stamp of philanthropy. The Raman Kant
Munjal Foundation - which Brijmohan set up in memory of his eldest son,
today runs a higher secondary school and a very modern and well-
equipped 100-bed hospital at Dharuhera. The group has also adopted
numerous villages and provides education, vocational training, drinking
water, roads, streetlights and sewerage.