Dealers say Hero-Honda split to drive sales of Munjal-owned Hero group

NEW DELHI: The Hero Honda brand will drive sales of Munjal-owned Hero group’s two-wheelers for the time being, said five large company dealers from across the country, adding that Honda is not in a position to start poaching on Hero Honda dealers.

"Honda doesn't produce many two-wheelers to do mass-scale poaching,” said Mumbai-based dealer Sandeep Baffna. “Moreover, Honda wouldn't like to spoil a long-term relationship,” adds Baffna, who is also the chairman of Auto Dealers' Association of Maharashtra.

In fact, the dealers said there are more reasons to be positive about the split. Hero will benefit from exporting more motorcycles and scooters.

Delhi-based Himgiri Motors owner Anil Goyal said: "The Munjals will be able to develop products for new markets quickly.” They will be able to generate better volumes as exports will get a big boost and profits won't have to be shared, added Goyal, who is the largest Hero Honda dealer in Delhi.

As far as the technology is concerned, the dealers feel that the Hero group has three years to develop its technology. "The split will give the Hero group the space to come up with its own products with indigenous technology,” said Baffna.

Goyal feels that there’s a reason to be positive. Eicher has done better after Mitsubishi’s exit, he said. Similarly, M&M has developed its own technology and is doing well. “Hero is a much bigger company and there is no reason why it shouldn’t do better without Honda,” says Goyal.

However, there are skeptics who doubt the success of the solo Hero brand. A Delhi-based dealer of Bajaj two-wheelers, Rakesh Jain, said: "As long as the brand name continues, sales won’t be impacted. But the Hero group is yet to prove itself in R&D and technology."

Brand experts believe Hero Honda has emerged as a generic reference brand in the bike segment. Harish Bijoor Consultants chief executive Harish Bijoor said: "The brand will have to go through a transition period. But there are brand solutions that can help sort out consumer dissonance."