Splendor, Passion are Hero's aces that trump rivals

The rechristening to Hero MotoCorp is of little consequence to rivals keen on grabbing a share of the Munjals' hold in the two-wheeler segment. “Unless a strong alternative to the Splendor and Passion motorcycles emerges soon, there is no way of stopping the Hero juggernaut,” a top auto executive told Business Line.

These two models alone account for monthly sales of around 300,000 units with the momentum as brisk as ever even after the recent split between the Hero group and Honda. It was a clear message that the market perception of these brands was strong enough to weather news of a divorce.

“After the former partners decided to go their own ways, cynics said it was only a matter of time before the Hero group was consigned to the archives. In reality, the leadership dynamics are not going to change in a hurry,” an auto sector official said.

The contenders
To that extent, sources say, Honda will have its task cut out as it begins a new innings in India sans Hero. Its wholly-owned arm, HMSI (Honda Motorcycle & Scooter India) is expected to wrap up this fiscal with 2.2 million units from two plants and even after the commissioning of its third facility in Karnataka, sales by 2013-14 will be around four million units.

Top challenger, Bajaj Auto, hopes to end 2011-12 with sales of over four million two-wheelers and is readying a new platform for its Pulsar and Discover brands which have been the core of its revival strategy. This would be the key to its growth plans in the coming years.

Hero plans big

In contrast, Hero MotoCorp (the erstwhile Hero Honda) has targeted numbers of over six million units this fiscal and made it known in London last week that it was eyeing ten million motorcycles and scooters by 2016. On the face of it, this is a modest objective as it translates into growth of 10 per cent annually.

“It is really up to HMSI or Bajaj to catch the customer's eye with a product that will take his attention away completely from the Splendor and Passion,” an industry veteran said.

Easier said than done even though reports are doing the rounds that Honda is planning to pull out all stops to achieve this goal. The differentiators will have to be in (lower) pricing and (higher) mileage because none of the other parameters will create any visible change from the viewpoint of impacting brand loyalty.