"Hum Main Hai Hero"
|Traded as||BSE: 500182
BSE SENSEX Constituent
|Predecessor(s)||Hero Honda Motors Ltd.|
|Founded||19 January 1982|
|Headquarters||New Delhi, India|
|Area served||India, Sri Lanka|
|Key people||Dr. Brijmohan Lall Munjal (Chairman)
Pawan Munjal (MD & CEO)
|Revenue||241.66 billion (US$4.1 billion) (2013)|
|Operating income||33.22 billion (US$560 million) (2013)|
|Net income||21.18 billion (US$360 million) (2013)|
|Total assets||53.08 billion (US$890 million) (2013)|
|Subsidiaries||Erik Buell Racing(49.2%)|
Hero Motocorp Ltd., formerly Hero Honda, is an Indian motorcycle and scooter manufacturer based in New Delhi, India. The company is the largest two wheeler manufacturer in the world. In India, it has a market share of about 46% share in 2-wheeler category. The 2006 Forbes 200 Most Respected companies list has Hero Honda Motors ranked at #108. On 31 March 2013, the market capitalisation of the company was INR 308 billion (USD 5.66 billion).
Hero Honda started in 1984 as a joint venture between Hero Cycles of India and Honda of Japan. 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.
In 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.
- 1 History
- 2 Operations
- 3 Products and services
- 4 Company performance
- 5 Listings and shareholding
- 6 Employees
- 7 Awards and recognition
- 8 Initiatives
- 9 See also
- 10 References
- 11 External links
“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.
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. In 2001, the company became the largest two-wheeler manufacturing company in India and globally. It maintains global industry leadership till date. The technology in the bikes of Hero Motocorp (earlier Hero Honda) for almost 26 years (1984–2010) has come from the Japanese counterpart Honda.
- 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 Motocorp SuperSplendor, 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, Hero Motocorp SuperSplendor, 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 had 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.
Formation of Hero MotoCorp
The name of the company was changed from Hero Honda Motors Limited to Hero MotoCorp Limited on July 29, 2011. 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.
49% stake in Erik Buell Racing
In July 2013, HMC acquired 49.2% shareholding in Erik Buell Racing, a motorcycle sport company which produces street and racing motorcycles based in East Troy, Wisconsin, USA. It paid approx. USD 25 million for this stake.
Hero MotoCorp has three manufacturing facilities based at Dharuhera and Gurgaon in Haryana and at Haridwar in Uttarakhand. These plants together have a production capacity of 6.9 million 2-wheelers per year. Hero MotoCorp has a sales and service network with over 3,000 dealerships and service points across India. It has a customer loyalty program since 2000, called the Hero Honda Passport Program.
It is reported that 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 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 in Rajasthan while their fifth factory is planned to be set up at Halol in Gujarat.
Products and services
The company sells a range of products in motorcycles and scooters (2-wheeler category). It also produces and sells spare parts for its 2-wheelers.
It has 17 models of motorcycles across the 100 cc, 125 cc, 150 cc, 225 cc categories.
- Ambition 133, Ambition 135
- CBZ, CBZ Star, CBZ Xtreme, Hero New Xtreme 2014
- CD 100, CD 100 SS, Hero Honda Joy, CD Dawn, CD Deluxe, CD Deluxe (Self Start)
- New HF Dawn,New HF Deluxe, HF DELUXE ECO
- Glamour, Glamour F.I.
- Karizma, Karizma R, Karizma ZMR FI
- Passion, Passion Plus, Passion Pro, Passion XPro
- Splendor, Splendor+, Splendor+ (Limited Edition), SuperSplendor, 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 has 2 models in scooters:
The company has sold over 47 million 2-wheelers since its inception in 1984 till March 2013. It sold 6.07 million 2-wheelers in 2012, out of which 5.5 million were motorcycles. Hero Motocorp sells more two wheelers than the second, third and fourth placed two-wheeler companies put together. Its most popular bike Hero Honda Splendor sells more than one million units per year.
In 2013, Hero MotoCorp registered best ever calendar year performance of more than 6.1 million unit sales. By selling 6.25 lakh units in the month of October, it became the first-ever manufacturer to cross landmark 6 lakh unit sales in a month. In the last quarter of the year or say in the festive season, the company sold more than 1.6 million units, while in non festive time in April–May 2013, it managed to sell out quite good numbers of units- 1.1 million.
The equity shares of Hero Motocorp are listed on the Bombay Stock Exchange, where it is a constituent of the BSE SENSEX index, and the National Stock Exchange of India, where it is a constituent of the S&P CNX Nifty.
As on 31 December 2013, the promoters Munjal Family held around 40% equity shares in Hero Motocorp. Over 61,000 individual shareholders hold approx. 7.44% of its shares. Foreign Institutional Investors hold approx. 30% shares in the company.
|Shareholders (as on 31-Dec-2013)||Shareholding|
|Foreign Institutional Investors (FII)||30.63%|
|Foreign Corporate Bodies||12.29%|
|Mutual Funds / UTI||02.56%|
|Financial Institutions / Banks||00.53%|
As on 31 March 2013, the company had 5,832 employees, out of which 66 were women (1.1%). It also had approx. 13,800 temporary employees on that date. The company had an attrition rate of 5.1% in the FY 2012-13. The company spent INR 8.21 billion on employee benefits during the FY 2012-13.
Awards and recognition
- The Brand Trust Report published by Trust Research Advisory has ranked Hero Honda in the 13th position among the brands in India.
- It received the 'Best value for Money Bike Maker' and 'Best Advertising' in Two Wheelers Category at the Auto India Best Brand Awards 2012.
The company started Raman Kant Munjal Foundation (RKMF), in 1992 when it was known as Hero Honda Motors Ltd., that looks after:
- Raman Munjal Vidya Mandir (an educational institution)
- Raman Munjal Memorial Hospital
During the financial year, the company spent INR 14 million on corporate social responsibility.
- "Board of Directors - Hero MotoCorp Ltd.". Hero MotoCorp. Retrieved 19 January 2014.
- "Annual Report 2012-13". Hero MotoCorp. 24 July 2013. Retrieved 19 January 2014.
- "Honda Motorcycle overtakes Bajaj as 2nd largest domestic two-wheeler maker". The Hindu Business Line. 10 April 2013. Retrieved 15 January 2014.
- "The World's Most Reputable Companies". Forbes. 21 November 2006. Retrieved 15 January 2014.
- "NSE FactBook 2013". NSE India. Retrieved 19 January 2014.
- "Milestones". Hero MotoCorp. Retrieved 15 January 2014.
- "Honda to Sell Hero Stake at Half Market Price". WSJ. 9 March 2011. Retrieved 15 January 2014.
- "Hero gets Honda stake at big discount". Economic Times. 9 March 2011. Retrieved 15 January 2014.
- "Hero relaunches itself, sans Japanese major". Business Today. 10 August 2011. Retrieved 15 January 2014.
- "Investment arm to merge with Hero MotoCorp". The Hindu. 5 June 2012. Retrieved 15 January 2014.
- "Automobile Industry India". Imagin Mor Pty Ltd.
- 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.
- Joint venture with Notiol Niloy Group
- "Hero MotoCorp picks up 49.2% stake in US-based Erik Buell Racing for $25 million". Economic Times. 1 July 2013. Retrieved 19 January 2014.
- "Hero Honda to up capacity". Financial Express.
- "Anniversary Leadership Series, Hero Honda Motors Pvt Ltd". Business Week.
- Nandini Sen Gupta (10 March 2011). "Hero-Honda split: Honda restrategizing its vendor policy". Economic Times.
- "Every Village, Every Home". Forbes 183 (12). June 2008. p. 80. ISSN 0015-6914.
- "The Story Behind Hero MotoCorp's Milestones in 2013". 15 January 2014.
- "Hero MotoCorp Ltd.". BSEindia.com. Retrieved 23 January 2014.
- "Scripwise Weightages in S&P BSE SENSEX". BSE India. Retrieved 23 January 2014.
- "Hero MotoCorp Limited". NSE India. Retrieved 23 January 2014.
- "Download List of CNX Nifty stocks (.csv)". NSE India. Retrieved 23 January 2014.
- "India's most trusted brands – Rediff.com Business". Rediff.com. 20 January 2011. Retrieved 2011-08-04.
- Official website
- News on Hero MotoCorp at Times of India
- Hero MotoCorp at Bombay Stock Exchange
- Hero MotoCorp at National Stock Exchange of India
- Hero MotoCorp on Facebook
- Hero MotoCorp's channel on YouTube