Yearly Archives: 2012

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.

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.

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.

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.

Back in the 1980s when the Hero group, makers of the then ubiquitous Hero cycles and the Pacer and Panther mopeds tied up with Honda to make motorcycles, they announced the collaboration as the dawn of a “Brave New Horizon”.  The collaboration was path breaking in many ways.  The world’s no.1 in motorcycles had collaborated with the world no.1 in cycles.  For the first time ever in India a 100cc four stroke engine featured in a motorcycle and put to rest all suspicions about its efficacy that came into being because of a notoriously unreliable 350cc four stroke engine in a motorcycle called the Enfield Bullet.  It also ushered in the previously unheard of mileage figure – 80 kmpl.  It kick started a new version of the Indian obsession with fuel consumption.  Nothing less than 80 kmpl was acceptable anymore.  The Hero Honda CD100 had arrived and how.  It had styling that could be credited to someone who failed all the examinations in a design school.  It sounded like a Deepavali ladi, had no visible frame and the engine looked like it could fall off any moment.  But it was anything but all that.  Despite its ungainly appearance, it was bullet proof (pun not intended) and more importantly kept its promise about mileage.

When talking about Maruti people claim that it is the car that put India on wheels.  I disagree.  It was the Hero Honda CD100, a product of a collaboration made in heaven, that really put India on wheels and offered to the common man an affordable alternative to the erratic public transport system that existed then and continues to exist even today.  The fill it, shut it, forget it ad campaign became the new mantra that was chanted by every aspiring motorcycle rider and he went straight to a Hero Honda dealer and got himself one.  The appearance of fragility of this light motorcycle actually belied a ruggedness and hardiness.  Hero left all the technology and design work to Honda and concentrated on marketing and since their forte was always the rural areas (their expertise in rural marketing was a result of their selling of cycles and the Panther and Pacer mopeds which were sold mainly in the rural hinterland) they took care to see that they had as much rural penetration as they did in urban markets.

Then the launch of the Splendor and later the Passion created history, albeit slowly and gradually.  The Splendor and the Passion were the two motorcycles that ensured that sales of the Hero Honda company went through the roof and left competition far, far behind.  There was only one instance for a couple of months when Bajaj overtook Hero Honda in motorcycle sales.  That galvanized Hero Honda into pushing their products forward and the competition backward in the market place.  The city slickers and boy racers mocked Hero Honda.  They said Hero Honda was sticker company and that their sense of aesthetic was absolutely favouring the garish and unsightly.  That did not seem to deter Hero Honda buyers, both urban and rural, from buying Hero Honda motorcycles.  Today the company which is renamed Hero MotoCorp but sells the same brand of motorcycles sells the double the number of motorcycles per month than does its competitor Bajaj.  Some years ago Hero Honda did the unthinkable and the unforeseeable, which is it overhauled Honda as the largest motorcycle manufacturing company in the world. So why did this JV come to an end?  We will come to that, but a small detour first.  This detour will help us understand the Honda story and mindset better.

At the same time when Honda entered into a joint venture with the Hero group, it also entered into another joint venture with Kinetic Engineering to make scooters which were two strokes and featured a gear less CVT transmission.  It introduced to India the first proper scooter that had the twist and go feature.  While the macho men (especially up North) thought this scooter was for sissies, the Kinetic Honda (as the scooter was called) achieved another first.  It put more and more of India’s young women on wheels.  A centrally mounted engine made for ease of balance, the CVT meant ease of driving and like all Honda’s it also had ease of maintenance.  These qualities slowly started drawing even men especially when they were reaching middle age towards the Kinetic Honda.  Honda’s JV with Kinetic was slightly different from the one with Hero.  Honda’s equity in the JV was higher than in Hero Honda.  Towards the end of the last century, Honda held nearly 64% of the Kinetic Motor Company.  It had more people on the Board of Governors.  It looked as if Honda was all set to take over Kinetic.  Just then Honda did the unthinkable.  It sold its share to Kinetic and exited the joint venture.

Two years later in the new millennium it set up its own subsidiary in India, the Honda Motorcycles and Scooters India.  It had an agreement with Hero Honda.  As per this agreement Honda would not make motorcycles for at least three years.  But it would make scooters.  In doing so Honda yet again did a first.  It introduced the Activa, a four stroke 100cc scooter with CVT and all metal body, the rear of which could be lifted for easy access to the engine.  More importantly it did not look feminine.  India’s burgeoning economy increased the size of the middle class considerably and this meant that more and more people were buying their own private vehicles, leading to increased traffic and as a consequence chaotic roads.  This in combination with no driver etiquette and lack of adherence to road rules (because most drivers and riders procured licences without passing any driving test or any test for that matter) meant that traffic snarls and crawls were becoming increasingly the order of the day.  At this time a four stroke scooter with a CVT and decent mileage made more and more sense.  And so at a time when everyone thought that the scooter segment had died and when the traditional scooters were no longer being bought, Honda single handedly revived the scooter market.

Bajaj tried to hit back with the Sapphire and later the Wave and failed miserably.  A little earlier TVS tried launching a 150cc geared four stroke scooter called the Spectra, an excellent product that just did not take off.  The Activa began the process of putting Indians, especially men, back on scooters.  Even women who contributed in great measure to the success of the TVS Scooty range started moving to the Activa.  The result; long waiting lists.  Honda also launched a plastic bodied and sporty scooter featuring the same mechanicals as the Activa and called it the Dio.  It did not do as well as the Activa but sold in decent numbers.  Honda then decided to attack the cow belt with the Eterno, a 150cc geared, all metal bodied scooter featuring a four stroke engine.  The scooter did well in the markets it was meant for but Honda pulled the plug on this scooter in a few years.  It saw no point in making scooters for a small number of people when there were long queues building up for the Activa.  Honda also introduced a 110cc scooter which looked and felt more upmarket than the Activa and called the Aviator.  It continues to do well in the market.  A couple of years ago, the Activa was upgraded to the same 110cc engine and demand continues to be unabated with waiting periods stretching up to 9 months.

Once the three year period where Honda promised it would not make motorcycles was over, it launched its first motorcycle, the 150cc Unicorn.  The motorcycle had all the Honda traits. A silky smooth engine, bags of torque, decent power, a monoshock suspension and rugged looks all contributed to its bullet proof reliability.  This introduction of a 150cc motorcycle was for two reasons.  One to not compete with Hero Honda’s products and two to take on Bajaj that was going great guns with the Pulsar 150.  Later on Honda introduced the 125cc Shine.  Strangely a year and a half ago, Honda added the CB prefix to all its motorcycles.  The Unicorn was CB Unicorn, the Shine became CB Shine and it also introduced an upmarket 110cc CB Twister and then a variant of the Unicorn called the CB Unicorn Dazzler.  People were mystified by this until the beginning of 2011, when the pieces of the jig saw puzzle started falling into place.  Honda was exiting the Hero Honda JV.  It wanted to keep the CB and CD as its trade marks and it was in preparation for this that the CBising was happening.

This means that Honda, after March 2014, will prevent its erstwhile JV partner Hero from using CBZ and CD Dawn and CD Deluxe branding on their motorcycles.  At the Auto Expo Hero MotoCorp showed all its offerings sans the Honda name and the CBZ Xtreme was shown as just Xtreme and the CD Dawn was shown as HF Dawn.  And talking of the Auto Expo, let us see what Honda did at the Auto Expo 2012.  After all this series of articles is about what can be inferred from the activities of companies at the Expo.  Honda’s display of cars was almost pathetic.  No new cars, no new launches, no concepts, nothing.  This was due to the fact that Honda suffered badly once because of the tsunami in Japan and the second time because of the floods in Thailand that destroyed its plants and reduced their vehicles to junk.  But when it came to two wheelers Honda at the Expo was aggressive and unstoppable.

Hitler would have been proud of Honda’s efforts at the Expo.  Honda simply blitzkrieged competition with a dazzling array of products from the humble scooter to its flagship and updated for 1012 CBR1000RR Fireblade.  Last year Honda issued a serious warning to Bajaj and Hero.  It launched the CBR250R at a price that was half that of the Ninja250R’s and it also provided it with ABS.  The CBR250R had runaway bookings which were triple that of the number of Ninjas that Bajaj moved in one year.  Out of the blue at the Expo, Honda showed the CBR150R and announced its intention to launch this motorcycle by March.  This is a warning to both Bajaj and its arch rival the world over Yamaha.  If the pricing of the CBR250R is anything to go by, the 150cc version will be well under the R15 that Yamaha makes.  But this is not all.  Honda has shown that it is now ready to go for the jugular of the Indian two wheeler market.  It showed its first major update for the Dio scooter which now looks even more gorgeous and sporty.  It has also unveiled its first mass market commuter the Dream Yuga and displayed it alongside the first motorcycle that Honda every built, the Dream.

A lot of people have pooh poohed the name Dream Yuga.  Behind what seems to a ridiculous name lies the ambition and intent of the company.  Yuga can have many translations in English.  But Honda seems to be using it to convey the idea of an era.  The original Dream motorcycle started the Honda domination in the world.  Honda is probably looking at the Dream Yuga starting the Era of Honda in India – read that as Honda becoming number one in India.  It has no other option.  After ending its JV with Hero and with Hero deciding to build its own brand without waiting for the end of March, 2014 it is obvious that the world’s largest motorcycle manufacturer in the world, for the first time in many decades will not be Honda nor will it be one with the Honda name appended to it.  So Honda’s becoming number one in India is not just about India.  Hero had overtaken its old partner in sales to become number one in the world.  Honda has to become number one in India in order to reclaim its status of world number one in motorcycle sales.  Honda knows that it has capacity constraints and therefore is in the process of setting up new manufacturing plants in different locations in India so that not only will there be more capacity but also distribution from factories and logistics will become simpler and more efficient.  What Honda wants, Honda gets, so ladies and gentlemen whether you like it or not, get ready for the Honda Era or the Honda Yuga.  How nice for Honda that it coincides with the new century and the new millennium.