Not often does an entrepreneur succeed to build two businesses in India that become the largest in the world in their respective fields. Ninety-two-year-old Brijmohan Lall Munjal, who passed away in Delhi on Sunday after a brief illness, achieved this rare feat. He, along with his four brothers, started Hero Cycles in 1956 which has grown to become the largest cycle-maker in the world. In 1984, he entered into a joint venture with Honda Motor Company, Japan, to manufacture motorcycles. This joint venture 'Hero Honda' was a big success and Hero Honda went on to become the largest motorcycle manufacturer in the world. The partnership with Honda ended in 2011. Hero MotoCorp (the company that was formed after Munjal bought out Honda's stake in the joint venture) defied critics and continues to dominate the Indian motorcycle segment.
Munjal was born in 1923 at Kamalia (in present day Pakistan). During the partition, his family decided to shift to India and settled down in Amritsar. When the brothers decided to start a bicycle parts manufacturing business, they felt Ludhiana was a better location and moved into the city. In 1956, they decided to venture into manufacturing bicycles. Hero Cycles was launched. It was not easy as no ecosystem existed for producing cycles. Munjal and his brothers forged on building them in the process. Today, Ludhiana is called the bicycle capital of the country where every component needed for a bicycle is available in the city.
In 1984, when the government liberalised norms and allowed joint ventures in the motorcycle space, Hero Group moved quickly to sew up an alliance with Honda Motor Company, Japan. Hero Honda products became an instant hit in a market that was dominated by scooters and mopeds. Hero Honda Splendor became a household name for its fuel efficiency. The joint venture lasted for 26 years. The first sign of a potential split came about when Honda set up its own company in India, Honda Motorcycle and Scooters India in 1999, and began manufacturing scooters. Though it created no apparent conflict of interest (Hero Honda did not sell scooters), the writing on the wall became apparent when Hero Group start voicing global aspirations. As per the joint venture, Hero Honda's ability to export was impaired. It also did not have a free hand when it came to research and development. The joint venture finally ended in 2011.
Munjal ensured that the breakup did not lead to a heartbreak for Hero. He and his sons - Pawan Munjal and Sunil Kant Munjal - ensured that new products were launched and its hold on the market held for a while.
The death of Munjal, who became chairman-emeritus earlier this year, comes at a time when HeroMotoCorp is facing its toughest challenge in years in the market. Its market share has dropped to 36 percent (from 49 percent levels in 2008-09), its lowest in 12 years. Its former joint venture partner Honda has become its fiercest competitor grabbing a market share of almost 30 percent. His sons now have a very big responsibility of fighting off competition and restoring Hero MotoCorp's past market dominance.
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