VOL. 52 ISSUE 12 MARCH 24, 2015 P91
Honda brand became the single
largest producer of motorcycles
in the world in the year 2001,
and has remained as such ever
since then.
But clearly the ambitions of
the company also changed over
time. so while we were the larg-
est manufacturer in the world,
we could not produce our own
technology, develop our own
models, or do our own engineer-
ing—all of which was done by
our partner, as per our agree-
ment. And we were not able to
sell in any more than those four
countries outside India. Again,
we had the title of the largest
producer of the world, but only
focused on India. We very much
wanted to go outside the country
with Hero products and make
it a global brand… as well as
develop our own technology,
produce innovation inside the
company, and also do value en-
gineering to be able to optimize
costs; and to be able to react to
the market very quickly. To do
all of that we needed—to have
control of the company, to do it
inside, not be dependent on a
technology partner supplying us
with products. So that was why
I decided to break up the Hero
Honda joint venture.
I understand you're an engi-
neer yourself, so it must have
been doubly frustrating for
you that you could only ever
be given a Honda-developed
product, and then manufac-
ture it without improving it in
any way.
Surely, indeed so. But I was
being very honest and open
about the relationship, so we did
approach Honda and ask them to
sit down and take a look at these
issues. We had lots of discus-
sions over the next few years, but
nothing changed. And so in the
end eventually the decision was
made to go our separate ways.
From April 1st, 2011 we became
two separate entities.
Was there a notice period?
We became Hero MotoCorp
in April 2011, but there was about
a three and half year transitional
agreement, under which Honda
agreed to give us a couple of
new models, and both of us
had to adhere to certain things.
There were some payments to
be made to Honda, but all the
earlier royalties were stopped,
and this transitional agreement
ended in June 2014. We had
the option of using the Hero
Honda joint brand name during
this time, but we decided to very
quickly to come up with our own
brand, and in August 2011 we
announced the creation of the
Hero brand with a new logo.
But I imagine the biggest
problem you faced was that
until then Honda had been re-
sponsible for all R&D, and for
creating each new model that
Hero Honda built and sold.
So you now had to invest in
creating your own product
development operation. Can
"ITS SUCCESS
FROM THE POINT
OF VIEW OF THE
BUSINESS, REVENUES,
PROFITABILITY,
PRODUCTS,
EVERYTHING TO MY
MIND WAS WAY
BEYOND ANY OF OUR
BUSINESS PLANS,
BETTER THAN ANY
ONE OF US HAD
IMAGINED THE WAY
THIS BUSINESS
COULD GROW."
