|Traded as||BSE: 500182
BSE SENSEX Constituent
|Founded||19 January 1984|
|Founder(s)||Dr. Brijmohan Lall Munjal|
|Headquarters||New Delhi, India|
|Area served||India, Sri Lanka|
|Key people||Dr. Brijmohan Lall Munjal (Chairman)
Pawan Munjal (MD & CEO)
|Products||Motorcycles, scooters, three-wheeler vehicles|
|Revenue||239.43 billion (US$3.7 billion) (2012)|
|Net income||23.78 billion (US$360 million) (2012)|
|Total assets||60.58 billion (US$930 million) (2012)|
|Subsidiaries||Erik Buell Racing(49.2%)|
Hero Motocorp Ltd., formerly Hero Honda, is an Indian motorcycle and scooter manufacturer based in New Delhi, India. 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 #108.
In 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. On 4 June 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.
“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. In 2010, it was reported that Honda planned to sell its stake in the venture to the Munjal family.
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 (1984–2010) has come from the Japanese counterpart Honda.
Hero MotoCorp has three manufacturing facilities based at Dharuhera, Gurgaon in Haryana and at Haridwar in Uttarakhand. These plants together are capable of churning out 6 million bikes per year. Hero MotoCorp has a large sales and service network with over 3,000 dealerships and service points across India. Hero Honda has a customer loyalty program since 2000, called the Hero Honda Passport Program.
The company has a stated aim of achieving revenues of $10 billion and volumes of 10 million two-wheelers by 2016–17. This in conjunction with new countries where they can now market their two-wheelers following the disengagement from Honda. Hero MotoCorp hopes to achieve 10 per cent of their revenues from international markets, and they expected to launch sales in Nigeria by end-2011 or early-2012. In addition, to cope with the new demand over the coming half decade, the company is coming up with their fourth factory in Neemrana, Rajasthan while their fifth factory is planned to be set up in Gujarat.
- 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 signed Shareholders Agreement signed
- 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 plus, 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 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.
- 2013-Hero MotoCorp unveiled line-up of 15 updated products including Karizma R, ZMR, Xtreme, Pleasure, Splendor Pro, Splendor iSmart, HF Deluxe ECO, Super Splendor, Passion Pro and Xpro, Glamour and Glamour FI etc. It also introduced three new technologies- Engine Immobilizer in new Xtreme, Integrated Braking System (IBS) in new Pleasure and i3S (Idle Stop and Start System) in new Splendor iSmart
Termination of Honda joint venture
In December 2010, the board of directors of the Hero Honda Group have decided to terminate the joint venture between Hero Group of India and Honda of Japan in a phased manner. The Hero Group would buy out the 26% stake of the Honda in JV Hero Honda. Under the joint venture Hero Group could not export to international markets (except Sri Lanka and Nepal) and the termination would mean that Hero Group can now export. Since the beginning, the Hero Group relied on their Japanese partner Honda for the technology in their bikes. So there are concerns that the Hero Group might not be able to sustain the performance of the Joint Venture alone.
The Japanese auto major will exit the joint venture through a series of offmarket transactions by giving the Munjal family—that held a 26% stake in the company—an additional 26%. Honda, which also has an independent fully owned twowheeler subsidiary—Honda Motorcycle and Scooter India (HMSI)—will exit Hero Honda at a discount and get over $1 billion for its stake. The discount will be between 30% and 50% to the current value of Honda's stake as per the price of the stock after the market closed on Wednesday.
The rising differences between the two partners gradually emerged as an irritant. Differences had been brewing for a few years before the split over a variety of issues, ranging from Honda's reluctance to fully and freely share technology with Hero (despite a 10-year technology tie-up that expires in 2014) as well as Indian partner's uneasiness over high royalty payouts to the Japanese company. Another major irritant for Honda was the refusal of Hero Honda (mainly managed by the Munjal family) to merge the company's spare parts business with Honda's new fully owned subsidiary Honda Motorcycle and Scooter India (HMSI).
As per the arrangement, it will be a two-leg deal. In the first part, the Munjal family, led by Brijmohan Lal Munjal group, will form an overseas-incorporated special purpose vehicle (SPV) to buy out Honda's entire stake, which will be backed by bridge loans. This SPV would eventually be thrown open for private equity participation and those in the fray include Warburg Pincus, Kohlberg Kravis Roberts (KKR), TPG, Bain Capital, and Carlyle Group.
Honda will continue to provide technology to Hero Honda motorbikes until 2014 for existing as well as future models.
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, to coincide with the third test match between England and 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 1 June 2012, Hero MotoCorp reported its highest ever monthly sales at 556,644 units in May, registering a growth of 11.28%.
Acquisition of Eric Buell Racing
On 1 July 2013, the company had announced that it has acquired a stake of 49.2% on Erik Buell Racing, a motorcycle sport company which produces street and racing motorcycles based in East Troy, Wisconsin, USA. It was reported that, the company has already made $10 million investment and the rest of the money is likely to be invested over the next nine months. The investment in EBR is being done through Hero MotoCorp’s newly incorporated and wholly owned subsidiary i.e., Hero MotoCorp Limited.
- Ambition 133, Ambition 135
- CBZ, CBZ Star, CBZ Xtreme, Hero Xtreme
- CD 100, CD 100 SS, Hero Honda Joy, CD Dawn, CD Deluxe, CD Deluxe (Self Start)
- HF Dawn, HF Deluxe
- Glamour, Glamour F.I
- Karizma, Karizma R, Karizma ZMR FI
- Passion, Passion Plus, Passion Pro, Passion XPro
- Splendor, Splendor+, Splendor+ (Limited Edition), Super Splendor, Splendor NXG, Splendor PRO, Splendor iSmart
- Hero Impulse launched in 2011 after the separation of hero and Honda. Its India's first off-road and on road Bike.
- Hero Ignitor launched in 2012
It is reported Hero MotoCorp 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.
The industry introduced Raman Kant Munjal Foundation (RKMF), an Initiative in 1992 when it was known as Hero Honda Motors Ltd. which is founded by Munjal Family (who owns Hero Group) that looks after :
- An educational institution Raman Munjal Vidya Mandir
- Raman Munjal Memorial Hospital
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- Key Milestones of Hero MotoCorp Hero MotoCorp, August 2011.
- "Two-wheeler makers ride high in May". Business Standard.[dead link]
- Forbes, none. "World's most reputed companies". Archived from the original on 2007-02-16. Retrieved 2007-07-08.[dead link]
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- "Honda Motor Co., Ltd. Formally Decides To Sell Stake in India Motorcycle Joint Venture With Hero Honda Motors Limited-DJ". Reuters. Retrieved 2011-08-10.
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- "Investment arm to merge with Hero MotoCorp". The Hindu (Chennai, India). 5 June 2012.
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- "Anniversary Leadership Series, Hero Honda Motors Pvt Ltd". Business Week.
- Hero MotoCorp Unveiled 15 New Products
- "Hero to buy out Honda's stake". Indian Express. Retrieved 2010-12-18.
- Sharma, Subramaniam; Philip, Siddharth (16 December 2010). "Hero Buys Honda's $1.9 Billion Stake in India Motorbike Maker on Exports". Bloomberg L.P. Retrieved 2010-12-18.
- "Munjal family & Honda Motor to discuss Hero Honda split today". The Times of India. 16 December 2010.
- "Hero, Honda split terms finalized – The Times of India". The Times of India.
- Hero approves Honda's exit from Hero Honda, India Infoline news service
- Higher royalty for Honda in split from Hero – Hindustan Times
- "Hero goes global; to unveil new brand identity in London – Corporate News". livemint.com. 25 July 2011. Retrieved 2011-08-04.
- "Hero Honda Sales Increased Up By 10 Percent in March 2009". burnyourfuel.com. Retrieved 2010-12-18.
- "Every Village, Every Home". Forbes 183 (12). June 2008. p. 80. ISSN 0015-6914.
- "Hero MotoCorp sales in May spurts 11%". 1 June 2012.
- "India's most trusted brands – Rediff.com Business". Rediff.com. 20 January 2011. Retrieved 2011-08-04.
- Newsdeck, OD (2 July 2013). "Hero buys 49.2% stake on Erik Buell Racing for US$25 million". overdrive.in. Retrieved 15 July 2013.
- Nandini Sen Gupta (10 March 2011). "Hero-Honda split: Honda restrategizing its vendor policy". Economic Times.