Company in the process of creating a new business structure
Country’s largest two-wheeler firm Hero MotoCorp draws major plans for export markets. While the company is preparing to enter new geographies this year, it is also in the process of creating a new business structure to drive sales in overseas markets.
“We have taken significant first steps to establish Brand Hero globally. We endeavour to build the brand equity globally by sponsoring international motor sports. Planned forays into select African and Latin American markets are being put into implementation. To begin with, we are focusing on markets where the volumes are large and where our existing products can be exported with minimum changes. We anticipate our exports to grow at least by 25 per cent in the current year. To sustain our efforts to emerge as a global player, we are in the process of setting up a new International Business organisation,” Pawan Munjal, managing director and CEO of the company said in company’s latest annual report.
The company’s exports registered a growth of 24 per cent at 164,570 units in 2011-12. Last year, the company doubled its scooter volumes in Sri Lanka through aggressive sales campaign. “On the export side, the company is targeting is to increase exports from three per cent of sales in FY12 to about 10 per cent by FY16,” according to Sneha Venkatraman – auto analyst of HDFC Securities.
It is planning to commence marketing and brand-building exercises shortly in select markets across Central & Latin America and Africa. A new International Business Organisation structure is currently being implemented to drive this initiative and growth. The focus will continue to be on markets, where volumes are large and products can be exported with no/ minimum changes.
Hero will be selling its 100 cc and 125 cc motorcycles in African and Latin American markets. “It has finalised specific countries in these regions to start with and is making necessary modifications to its products to suit target markets. While it would be looking at having assembly operations in key export markets at appropriate time, it would be leaving distribution to the local partners. It expects export volumes to reach one million by FY16-17. However, ramp-up in exports would result in loss in the initial few quarters as the company will be making investments to enter and expand various markets,” Jinesh Gandhi, auto analyst, Motilal Oswal Securities.
