Forbes India 15th Anniversary Special

Hero Performs Better Under Pressure: Pawan Munjal

Post the split with Honda, it was widely believed that it is only a matter of time before Hero MotoCorp unravels. But Pawan Munjal says that's wishful thinking

Published: Feb 28, 2014 07:29:41 AM IST
Updated: Feb 24, 2014 03:36:54 PM IST
Hero Performs Better Under Pressure: Pawan Munjal
Image: Amit Verma
Pawan Munjal (left) with Erik Buell

At the Auto Expo 2014, Hero MotoCorp launched five new motorcycles and a couple of scooters. All of them owe their lineage to Hero’s research and development unit and the co-operation with Hero’s technology partner Erik Buell. Forbes India caught up with Pawan Munjal, managing director of Hero MotoCorp, and Erik Buell, chairman of Eric Buell Racing.

Q. You have had a long list of launches. Is this something that you have been looking forward to for a while now?
Absolutely. It was very difficult to hold all the stuff inside me. I have been seeing all these things conceptualised; I have been giving my own thoughts and ideas to all the teams in the new Hero ecosystem. Over the last two years I have been seeing the progress, the mock ups, the clay models, physically going to other R&D centres like Bologna [Engines Engineering] and Wisconsin [Erik Buell], spent a lot of face time on Skype. I am thrilled to see what has come out of these two years of hard work.

Q. What is the relationship that you two partners share?
We have a very great business relationship but first of all we are very good friends. We met at a race track a few years ago when a mutual friend introduced us. And we started talking about motorcycles, business, family and we just hit it off. Pawan wanted to go global and I knew about the market and his company. I wanted to know more about the Indian market because there are so many motorcycles being sold here. That finally led to a show bike that we did a couple of years ago.

Q. The domestic two-wheeler industry has had a pretty flat year. How do you look at it and what’s your outlook going forward?
The Indian economy, the automobile industry and the two-wheeler industry performed much lower than it had budgeted for. If you compare the growth numbers with the rest of the world, they look healthy. But for a nation like ours, we cannot go below a certain number of growth in order to carry on the momentum and to create jobs. And you have seen the impact on the commercial vehicles and the car industry. When the two-wheeler industry gets impacted, the economy is really doing badly. But thankfully, even in this state, there are two players who have still managed to show some growth. Going forward, my belief is that in the second half of 2014, the market should start looking up, albeit slowly and gradually.

Q. Hero’s done well?
Yes. If you ask me then I think Hero performs better under pressure. The day before yesterday, I played golf with Tiger Woods. When I was going into the game, my mind was already overworking itself—‘Tiger Woods is going to be standing next to me. My legs will be shaking, my hands will be trembling and I will hit the ball in a bush!’ But I hit a brilliant drive! With thousands of people looking on. And that was just the beginning of the 18 hole that I played; I carried that form very well. So I believe that I can perform really well under pressure. And I can lead the company really well under pressure.

Q. What are the things that have really taken your time in the last couple of years?
Three things really. First is to somehow bring down the cost in the company. And the biggest cost is, of course, the material cost of the products. We have been working very hard; we have an internal project going on there [called Leap] which has already started to show some results. Second, and the very important one, has been building our very own technological capability. We had been getting technology, designs, drawings, from our erstwhile partner for all those years during the partnership. We built some capabilities but under the arrangement we could not build all of which we have started to do now. And we are doing it at a very fast pace. We are building an R&D centre outside Jaipur. I am letting my people completely free in what they want to do in terms of letting their minds race. What you are seeing here today is a result of that. The third big one is taking the Hero brand global. Making it as big a brand globally as it is in India. 

Q. There was a lot of scepticism around the idea that technology is Hero’s Achilles heel. With this whole host of products, you have in a way proven a lot of people wrong. Will that be a correct assessment?
I would think so. Let me take you back for a while. Clearly it was a big decision for us to part ways with our erstwhile partner and a partner like Honda. Me being the CEO of the company, I have a huge responsibility on my shoulders. Not just to show financial results but there are millions of people belonging to thousands of families who are directly, indirectly, completely dependent on Hero MotoCorp. So I had responsibility for all those people and I took my time to take this decision. I involved all my senior team members; we used to discuss this and when everybody said yes we can do it, we will do it—that is the time I proposed to Honda. Once we took the decision, we have not looked back. And in the last two-and-a-half years, we have done very well. Way beyond my own expectations.

Q. The other point of scepticism is that perhaps you have been very late to go the exports route…
Firstly, it is never too late. There are huge opportunities out there and those markets are growing. There are a lot of new entrants coming into the Indian market which is growing. I have the confidence after performing so well over the last three decades and building capabilities in manufacturing, selling, marketing and now in technology. Especially in markets like Africa and Latin America. The other fact is that some of the Indian two-wheeler companies have gone into these markets and they have established the Indian brand. Because we were able to compete with them here, and also with foreign brands, gives me the confidence to go out there.

(This story appears in the 07 March, 2014 issue of Forbes India. To visit our Archives, click here.)