TeaYears ago at the India Gate C-Hexagon, Pawan Munjal and his father Brijmohan Lal Munjal stood in front of an assembled media corps to celebrate the rollout of Hero Honda’s 10 millionth motorcycle. A decade later, in 2011, an emotionally emotional Brijmohan Lal was speaking to the media on the terrace of the Taj Mansingh Hotel, announcing Hero and Honda’s divorce.
While analysts and journalists believed that Honda had given Hero a good deal at the time, Pawan Munjal, who was running the company till now, was determined not to become a footnote in Indian corporate history. He knew that his former partner, Japanese major Honda, who could have parted ways on good terms, wanted nothing less than to dominate the Indian market. Bajaj Auto and TVS Motors, Hero Honda’s two rivals, were left in the dust in India but had great success in Africa, South America and Southeast Asia. Even today if you travel to countries in Africa or South America, you will be surprised to see the number of vehicles named Bajaj or TVS. But Hero was fond as Honda was already a global company and for some strange reason Hero was not allowed to export anywhere other than neighboring countries and Colombia.
Not that it mattered – the Indian market for commuter motorcycles and scooters was expanding rapidly in the early 2010s. Hero’s tremendous reach in every nook and corner of the country made him a market leader that was impossible to dethrone. But Munjal realized one thing in conversation with me at the time: If Hero is to grow in India, it needs to become a global company. They needed technology, products and, importantly, a brand. Therefore, it was not surprising that in late 2011, Hero began its new corporate identity with its patented Bollywood song and dance routine at the O2 Arena in London.
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Hero’s welcome in the changing world
Hero was in a hurry. Company executives, which still operate from small buildings in Delhi’s Basant Lok Complex (Hero moved its headquarters only after Brijmohan Lal’s demise in 2015), are looking to the world for potential partners to sell and produce products. were investigating. But India was still at home and Munjal knew that his biggest weakness was the lack of a research and development center compared to his domestic rivals. Therefore, thousands of crores of rupees were poured into the Hero Center for Innovation and Technology (CIT) in Kukas, on the outskirts of Jaipur, Rajasthan. Top technologists and engineers were hired from all over the world. Munjal was determined to take the company to the next level.
But the world was changing, not only politically in India but also when it came to propulsion. Small battery-powered bicycles and then scooters were a growing market in China. As fuel prices rose at the pump, rechargeable batteries for two-wheelers made economic sense as the running cost was a tiny fraction of petrol’s power. These were written off as an inconvenience for the three big players, but China’s electric two-wheelers could redefine the market not only in India but across the globe.
As big companies including Hero were caught flat-footed, not knowing what to do, a multitude of start-ups emerged to break their grip on the Indian market. Some Pawan was also familiar with Munjal and Hero MotoCorp, and to Munjal’s credit, he sensed this change and invested in a smaller company called Ather Energy. Today, Ather is known as a pioneer in the electric scooter segment in India and Hero MotoCorp is the largest shareholder of that company.
As far as Hero MotoCorp is concerned, they were slow with the ball. Like a cricket batsman waiting for the start of the innings, the hero kept on playing and missed ball by ball. Dozens of smaller competitors jumped in to take down Hero, just as Lilliput tied Gulliver, buoyed by generous government subsidies, though many of these companies were just assembling Chinese kits. Others, such as Ather and Ola Electric, were somewhat more serious, actually developing their own technology. Even Bajaj Auto and TVS Motors had temporarily dipped their toes in the market. But everyone wanted to know what Pawan Munjal and Hero would do. Hero’s electric product launches were repeatedly delayed due to a shortage of batteries and semiconductors and, some suspect, an unsuitable product.
Last Friday, under a dome painted like earth on the lawn of the CIT, Pawan Munjal finally offered his hand. They had already announced that a few months back the brand would be called ‘Vida’ (pronounced as ‘Vida’ for ‘life’ in Spanish) (Due to the dispute with Hero Electric, the Hero brand would be used for electric two-wheelers). vehicles, a firm run by another branch 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 its flagships, it has batteries that can be removed and charged at home. Munjal clarified that the batteries comply with all AIS standards for safety. The company has already tied up with Bharat Petroleum and Hindustan Petroleum to set up a network of charging stations across the country and will share its charging network with Ather.
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Not only India, eyes on the whole world
Munjal is adamant that he did not want to launch a half-baked product. Vida’s marketing line is that it has created India’s ‘not first’ electric two-wheeler. And while the Vida V1 is expensive – its two variants costing Rs 1.45 lakh and Rs 1.59 lakh, which are more expensive than competing products from Ather and Ola – a news item that appeared on the morning of launch could suddenly lift the market. Is. Audit by Automotive Research Association of India (ARAI) found it That many start-ups in the electric two-wheeler space, including Hero Electric, are not eligible for central government subsidy for electric vehicles as they manufacture their products in India with at least 50 per cent of the components locally sourced. requirement has not been met. According to industry insiders, however, this was bound to happen.
Munjal believes that Veida’s product offering, top-in-class, attractive financing schemes and Hero brand along with an assured buyback after 16-18 months of usage, still entice customers to buy Veida V1. However, the product is only going on sale in Bengaluru, Delhi and Jaipur on October 10th, with delivery in mid-December 2022. “Eight more cities will be added to the network by mid-December,” Munjal said, adding that Vida will take advantage of Hero’s extensive dealership network. “Dealers are our biggest strength.”
Importantly, Munjal pointed out that the Veida V1 was not a product only for India, “Our plan to export the Vida V1 is not long term but short term, we are planning to launch it to Bangladesh, Colombia and even Europe within a year. I will start exporting.
Munjal may be late in the game, but he knows that none of his rivals, even the new ones, are up for esports anywhere. In fact, Vida’s plan to go global is evident in the brand name—vida is a highly recognized Spanish word, a language of South America and even spoken in English- and French-speaking parts of Africa. She goes. And along with the V1 and future products, a second electric scooter with swappable batteries that will use Hero’s partnership with Taiwan’s battery-swapping leader Gogoro and even an electric motorcycle is already in the works.
If you’ve read the story, you know that the Lilliputians couldn’t bind Gulliver forever, they just gave him a little humor. The hero in this story is Gulliver and it has risen up – only this time, it plans to dominate not only India but the world as well.
@kushanmitra is an automotive journalist based in New Delhi. Thoughts are personal.
(edited by Prashant)