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Hero gears up for international foray

Source : BUSINESS_STANDARD
Last Updated: Sun, Mar 17, 2013 03:56 hrs
A worker cleans a bike inside a Hero MotoCorp showroom in Mumbai

​The country's largest two-wheeler maker Hero MotoCorp, which is set to kickstart its international business by foraying into new geographies by the end of this financial year, will design and develop all future products taking into account requirements in global markets.

While hybrid scooter Leap is scheduled for an international launch upon introduction, senior company executives hinted that the company is working on a few other products as well to expand its footprint overseas.



Anil Dua, senior vice-president (sales & marketing), Hero MotoCorp said, "The Leap is not only targeted at Indian customers but is for the global market. In fact, all future product developments plans will be fed by Indian as well as global requirements. That is why we do not term it 'exports' operations' but call it our international business. Our idea is not to see what we have and what we can give but to address what the market requires. All future products will be based on this principle." The company has identified 30 countries for its international business operations and is on course to enter 8-10 new markets in Africa and Latin America by the end of the current fiscal.

Hero MotoCorp's product interventions for the global market assume significance as the company is eyeing sales of one million units from its international business by 2016-17. The company exported a mere 144,156 two-wheelers (amounting to 2.6 per cent of overall sales) to existing markets in Sri Lanka, Nepal, Bangladesh and Columbia between April and February this fiscal. Dua added, "We will announce them (new markets) by the end of this fiscal. We may or may not introduce Leap in FY14. Others things may happen before the Leap. It is a high technology statement and while it is important we are not going to hurry. It is for global markets and we have to get it right."

Interestingly, Hero's product development philosophy is distinctly differentiated from that of its former partner Honda and Motorcycle and Scooter India (HMSI) which has recently set up an integrated Technical Centre at its Manesar facility to roll out India-specific products at aggressive price points into the domestic market.

Keita Muramatsu, president and chief executive, HMSI, had told Business Standard while the country is set to emerge an export hub for the company, the focus will be to develop core products for Indian market. "The focus is on the domestic market. India specific products developed at the Centre may later be exported to other countries", Muramatsu had said.

While Honda is looking at shoring up 30 per cent of its revenues of its two-wheeler business from the Indian subsidiary by the end of the decade, Hero is aiming 10 per cent of total revenues of $ 10 billion from its international business in the same period.

To grow its overseas presence Hero MotoCorp managing director and chief executive officer Pawan Munjal has said that upon gaining the requisite volumes the company would set up assembly plants in Kenya, Nigeria, Columbia and Bangladesh. "I am looking at setting up hubs to grow footprint globally. The company is looking at setting up assembly bases in Kenya, Nigeria, Columbia and Brazil over time to meet demand in Africa and Latin America," Munjal had said.

Bajaj Auto with exports of 1.2 million units till February this fiscal is the largest exporter of two-wheelers from India.

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