Hero MotoCorp at the 11th Auto Expo 2012 : Impressive Lineup

I am sure you think that seems like the title of a David Dhawan directed Govinda starring film that is aimed at the mass audiences that go to watch ‘tapori’ movies rather than the more restrained upper crust of society who feel the necessity to watch something more meaningful like say Govind Nihalani’s “Ardh Satya” or if you are even more upper crust a meaningfuller movie like Fassbinder’s “Marriage of Maria Braun” or if you are upperest crust then it has to be some meaningfullest movie made by Tarkovsky, preferably in the Swedish language.

There are innocent idiots like me who always believed that movies were all about business and that they took money to be made and once they went to the hustings they had to make money back with profit for the producers et al.  So I really don’t understand how these arty farty well maybe not farty but certainly arty movies by desi and phirang directors actually get made.  There must be some guilty conscience laden business person who unloads his/her guilt by indulging in a bit of philanthropy by funding films that idiots and country brutes like me do not understand.  The mass masala movies may seem garish and loud but they satisfy the necessities of the aesthetically challenged and pander to their dreams of all kinds including the wet ones.  Before you start thinking that you have somehow ended up on a website dedicated to film “critiqueing” let me lay your fears to rest.  This is Riot Engine and here articles are written about automobiles and automobile manufacturers.  In fact, this particular article is the fifth in a series about the various participants at the Auto Expo and what their displays say about their future plans.

Thus far I have profiled and felled Bajaj, KTM and Kawasaki with one keyboard stroke, since they were not there at all.  I then picked up the Japanese, Yamaha, Suzuki and the mighty Honda. When talking about Honda I also talked about its erstwhile joint venture partners in India, the Hero group and Kinetic Engineering.  The latter has sold out to the ambitious Mahindras and the former is now on its own.  Now comes your relevant question.  What has that rubbish written at the top of this article got to do with Hero MotoCorp, the now separated partner of Honda?  I can assure you that what was written at the top is not rubbish at all.  It is an analogy, one that is commonly used by some illustrious writers in the auto journalist fraternity.  When the company called Hero Honda existed despite their considerable and most enviable success, they have been at the receiving end of some very uncharitable remarks, some made in passing others not in passing, by automotive journalists. We also know that this is the day and age of citizen journalism thanks to the internet the most democratic medium so far.  These citizen journalists through their personal blogs or through the various automotive forums on line have been perpetuating this impression about Hero Honda then and Hero MotoCorp now.  This is an impression that is not one based in any education, this is just the furtherance of a stereotype.

So to put it succinctly, Hero Honda then and Hero MotoCorp (to be referred to as only Hero from now on) now have been unfairly characterized by all kinds of auto journalism.  At the centre of this characterization are a couple of issues.  One refers to the lack of technological capability in the Hero group despite 25 years of association with Honda and two the sense of aesthetics and the nature of upgrades that have been carried out on Hero Honda products.  If the display at the Auto Expo is anything to go by it seems as if the first of the two objections that journalists have raised is spot on.  We will comeback to that very soon.  Let us consider the more controversial criticism that centres around the nature of upgrades which are non-technological and aesthetic in nature.  In order to understand this we need to turn to the colonial mind that our auto journalists possess.  Good aesthetics=European cars and bikes.  Good engineering (including high revving engines) but flimsy quality=Japanese cars and bikes.  Horrible aesthetics and not very good quality engineering=Korean cars and bikes, horrible aesthetics and agricultural engineering=American cars and bikes.  Everything coming out of India in all aspects does not even command the respect that a dog turd does.

Hero Motocorp Passion Pro Leaf Green MetallicHero Motocorp Spendor Plus Candy Red

Now locate Hero in the context of this mind.  According to European sensibilities what Hero has been doing qualifies to be called yucky, pukey etc.  Their bikes have stickers that have loud and garish colours.  I now request you dear reader to open your mind.  Turn your eyes to the state of Rajasthan – a state of breath taking beauty.  Stands out for its colours both in nature and in the clothes that people wear.  Electric colours are the norm for the clothing or for painting houses.  Even the Europeans still suffering from the hang over of colonialism go to Rajasthan to enjoy the beauty that its colours and the rhythm of sounds that its folk culture demonstrate.  Look at our national bird, the Peacock, our national animal, the Tiger and look at us the people, we are not melanin challenged (I have borrowed this expression from my friend Pratap Antony) and pale like the Europeans.  We are a colourful society and a vibrant civilization.  So what is seen as garish by the stereotyped minds is anything but that.  And that shows in the ultimate litmus test.  Sales.  The numbers that Hero enjoys are in the stratosphere while most others are still in the lower layers of the atmosphere.

If you want to attribute the success of Hero Honda solely to Honda, I would say think again.  Honda has been on its own in India for more than ten years now and while it has done exceedingly well it has not yet reached the halfway point as far as sales are concerned in comparison to Hero’s sales.  So there is something that Hero is doing which must be right and I think that something has everything to do with understanding the wants and desires of the Indian two wheeler rider.  Of course one must also say that Hero enjoyed the first mover advantage as far as four stroke enomiser motorcycles are concerned but again everything cannot be put down to that alone.  Global brands such as Yamaha and Suzuki are struggling while homegrown brands like Bajaj and TVS while doing well in their own right, are no where near the success of the Hero group, at least as yet.

Now for the valid objection about Hero not doing anything to build its engineering capabilities.  That is true but perhaps one should take into consideration the fact that having the mighty Honda as your partner means that you are not allowed to develop any indigenous R&D of your own.  Honda wants no threats.  But, and this but is very crucial but, it maybe wrong to assume that Hero has now been left high and dry thanks to not building up its own R&D.  Look at the products that Hero Honda had prior to the decision to terminate the joint venture.  Most of them were built on one platform and one engine, all could be traced back to the original CD100.  Except for making the sloper engine compliant with pollution norms nothing earth shattering was done anyway.  The other platform on which the company tasted some success is the CBZ platform.  Honda made Hero Honda discard the original 156cc engine that was there on the CBZ and brought in the 15occ engine used on the Unicorn.  This spawned the successful CBZ Xtreme and the Hunk and also the not so successful but still selling Achiever.  In the overall scheme of things the third platform which spawned the Karizma and the Karizma ZMR are irrelevant.

Hero MotoCorp HF-Dawn at the 11th Auto Expo 2012

Now let us turn to the crux of the issue, Hero’s display at the 11th Auto Expo.  Even though vehicles in the showrooms are still carrying the Honda suffix the vehicles displayed dropped the Honda name completely.  Since CD and CB are trade marks of Honda the CD Dawn was rebranded HF Dawn and the CBZ Xtreme just Xtreme. Now to understand the implications of this.  In sales terms a bulk of sales of Hero comes from the Splendor and the Passion named motorcycles, much more than from the CD Dawn and CD Deluxe, which sell mainly in the rural areas where the Hero name is more of consequence than Honda.  So one would assume that the withdrawal of the CD and CBZ prefixes will not do too much damage since even in the urban areas for sometime now the dealers have been referring to the CBZ simply as the Xtreme and also because the Hunk too sells pretty well.

A late entrant into the scooter business, Hero has been seeing an increase in the sales of the Pleasure scooter though it started life out as a scooter for women, Honda’s capacity constraints and long waiting periods have translated into benefits for the Pleasure which now sells in excess of thirty thousand units every month.  Even that is more than the combined sales of all models of Yamaha and Suzuki.  Now let us see what Hero has done after the announcement of the split.  It has launched a new Dakar style motorcycle called the Impulse, which is not a half baked attempt like the SX Enduro that Bajaj tried to sell many years ago.  The Impulse is another Honda sold in Brazil as the Honda NXR150 Bros. At the Expo Hero unveiled for a second time the Maestro scooter which is based on the Activa and a new variant of the Passion featuring the same engine that does duty on the Honda CB Twister and the soon to be launched Honda Dream Yuga.

Hero MotoCorp Maestro at the 11th Auto Expo 2012

The sceptics among you must be thinking so what these are all Honda products, and therefore it says nothing about Hero. In fact, it reinforces that the company has no technology.  If you are thinking along those lines, I will differ with you.  What message is Hero sending to its buyers now?  Well the joint venture maybe over but what you get are still Hondas and therefore nothing has changed on that front.  If you have no problem buying a Hero, here we are.  If you have a problem with us dropping our surname no problem, we have only dropped the name, not the technology.  Hero has marketing expertise and manufacturing capacity, the second of which is missing in its main rival Honda.  While all Honda products have waiting periods, Hero products that feature the same Honda engines that are doing duty on the Hondas, are available off the shelf.  Why wait for the Unicorn while I can get myself an Xtreme or the Hunk, after all the engine is the same and both bikes are not chassis challenged.  Why wait for an Activa when I can get a Maestro that features the exact same mechanicals in a different body style?  So you see its not all that bad for Hero.

But having said that there is no room for complacency.  Hero has done the smart thing by not waiting till March, 2014 to begin its own brand building exercise.  It has also shown great savvy in procuring Honda tech for its soon to be launched products.  It is also doing the right thing by poaching capable people from various R&D departments of various bike and engine manufacturers.  These days the good thing is there are lot of boutique firms that offer technology consultancy.  Ricardo and AVL are two such companies.  Hero has understood what level of quality has to be maintained in order to keep its buyers.  All it has to do is keep working towards creating its own products while there is still time because till then they have the backing of Honda technology, so what if they have had to pay royalties for it.  So it is really up to Hero now.  It is not in a very bad position, in fact, I would say it is in a very good position. The ad campaign featuring A R Rahman’s song “hum mein hein Hero” along with visuals of audience that they have taken themselves and uploaded to the Hero website and featuring those visuals in the ads on TV has already given a warm feeling to the Hero brand.  It just needs to keep this momentum, for Honda and its ambitions are a definite threat to Hero’s throne, the stature of being number one.  But while Honda is still building capacity, Hero has time on its side.  So for now and for another couple of years, Hero is Hero No.1.  What it does in the interim will decide if it can keep the mighty Honda at bay.  That is a story that time will script.  Till then we shall wait and watch.