'Our target is to reach annual turnover of Rs 60k cr by 2020'

Sitting at the helm of affairs of Hero MotoCorp as Chairman, Managing Director and CEO since 2015,  Pawan Munjal steered the company in steadfast way through the global recession, in a solo journey. Taking the mantle from his father Brijmohan Lall Munjal in 2001, when Hero became the world's largest two-wheeler manufacturer by volumes, Pawan Munjal worked hard to make Hero a global brand with in-house technology and innovation.

In an interaction with DH on the sidelines of the launch of  Splendor iSmart 110 in New Delhi, Munjal underscores his plans to wade through the global recession, and Hero’s failure to reach the sales target.   

How far have you succeeded in making the brand Hero global?
To make Hero a global brand, we have been tirelessly working to get more innovation and more technology done in-house. We have made it happen by opening the Centre of Innovation and Technology (CIT) at Jaipur. Here we have been giving focus on hardware and software which will help us compete globally. I have full faith that the CIT will come up with new frames, new chassis, and new engine for Hero MotoCorp. We have our own strategy to come up with innovative products.

How you are looking at export performance of the company?
We are currently present in  32 countries, and plan to enter 50 countries by 2020, with 20 manufacturing facilities and an annual turnover of Rs 60,000 crore. Due to slowdown in the global markets where we expanded, sales have not been as per expectations and the company will reassess its targets. Since we have gone to Africa and Latin America, numbers have not panned out as we have planned. The first 2-3 years have not gone as expected. As of today, we have not revised our targets, but yes, we will sit down and have a relook at it. Majority of these countries where we expanded into are oil-dependent economies and the global crude price fall has affected demand from those countries. In 2013, we  had announced to sell around one million units, around 10% of its annual sales, in global markets by 2017.

How do you view the domestic market?
A good monsoon coupled with the 7th Pay Commission will help in boosting demand for two-wheelers. I would imagine that the impact of a good monsoon will come late in the year. We expect the second half of the fiscal to be better than the first, and sales will pick up around the festive season. Hero MotoCorp reported total sales of 66,32,322 units during FY2015-16, as against FY2014-15 sales of 66,31,826 units, which marks growth albeit by a thin margin.

Can you throw some light on new products in the pipeline?
As the market leader in India and as a global organisation, we constantly strive to lead the industry towards cost-efficient and green technologies for a sustainable future. The new iSmart 110 is another example of our efforts, featuring a BS IV-compliant engine along with the fuel-efficient i3S technology. The next model launch will be around the festive season. The future models that we are planning to develop with US-based Erik Buell Racing (EBR) are under review. Hero and EBR planned to developing a 250cc bike and a scooter. We are also looking seriously at dwindling motorcycle sales compared with the scooter sales in the country.

How you are planning to end the licence with Honda?
Hero is producing four models — Impulse, Passion Xpro, Ignitor and scooter Maestro — under the licence from Honda which we can do till 2017. We are planning to phase out each of these products even before the licence period. We are focussing more on own designed and developed models across all segments.