[pranavshet]

Respected Members,

I'm writing this article in context to the series of recent resignations by senior management personnel of the company over the past 2-3 years. Their top management has been shaky of late which denotes there is no stability in operations or no clarity in the vision of the company.
The recent one being Mallo le masson Head product planning, strategy & M&A.

I was just going through the sales numbers of Hero Motocorp for the past few months. The trends were concerning and called for strategic intervention by top management.

Hero Moto corp has literally become one product company. Currently, splendor contributes nearly 70% of its total volumes. The volumes for Passion, Glamour & HF Deluxe have halved. This is an alarming situation for Hero. They have never been in this situation before. With Honda breathing down its neck, the top management of hero is not even acting to stem the loss of market share to its erstwhile partner.

Their recent launches barring xpulse to a certain extent have been nothing but duds. The products lack appeal. Xtreme 16 R which was promising when launched has sorely been not updated mechanically. The engine powering it is a modified version of unicorn engine. The same is the case for xtreme 200R & Xpulse.

The company has been facing lots of reliability issues which was never the case before. The BS-6 transition for them was not a great one. The splendor with 97.2 cc engine which was a symbol of great reliability has been riddled with issues in BS-6 avatar. A lot of components have got major redesign which might have affected reliability.

The quality of their entry-level products has certainly gone down. The reason may be attributed to moving away from honda approved vendors to ones that are lower in cost. The engines on their new products have rusting issues which was never the case when it was hero honda. Their chassis have cracking issues.
I suppose the LEAP program they undertook to optimize the costs have made more harm on the quality front. They have written lengths about LEAP program in their previous annual reports.

Their CEO Mr. Munjal always talks about big bikes being under development for eternity. We have been hearing about premium products' introduction since 2014, but still, not a single product has been introduced.

In their recent earning conference call the management referred to the XTEC variants as premium products. There seems to be a major difference in how the management interprets the word premium to how a normal person interprets it.


Would love to know your take on these my dear folks. I would be writing part II in detail shortly.

Till then, Ride safe, Drive Safe, Wear safety gear and Take care.

Regards
Pranav Shet

[saitvsk23]

Originally Posted by pranavshet

Respected Members,

I'm writing this article in context to the series of recent resignations by senior management personnel of the company over the past 2-3 years. Their top management has been shaky of late which denotes there is no stability in operations or no clarity in the vision of the company.
The recent one being Mallo le masson Head product planning, strategy & M&A.

I was just going through the sales numbers of Hero Motocorp for the past few months. The trends were concerning and called for strategic intervention by top management.



Till then, Ride safe, Drive Safe, Wear safety gear and Take care.

Regards
Pranav Shet

Dear user, I would take your post as the fuel to a long rant about how Hero's been going downhill in the past decade. I will promptly make comparisons between the 2 decades (2000-2010 and 2012-2022).

Please bear with me.

I do agree with you. On this esteemed forum, I take great pride in promptly pointing out Hero's wins and losses. Its been the case with the Xpulse for a win, and the rest of their product line-up for losses.

As of now, I'm pursuing my bachelors in automobile engineering and the reason is solely because of my dad's 2003 Splendor+. It was a unique machine. Sure, they were a bunch of Splendors on the road in the typical black-white-blue combo, the classic 3 stripe - black with a white-pink-blue stripe, and the long gone black and orange swoosh. My dad's splendor had red instead of the blue from the common color. This bike ignited my passion (pun intended very much) for bikes in particular, and that too with this very company.

1. How Marketing was done back then.

Hero Honda Motors Ltd. really knew how to pull off marketing campaigns very well. It started with the "fill it - shut it - forget it", a slogan so common that it literally attributed to the maintenance of the CD100. Then came the Desh ki Dhadkan advertisement, which gloriously showcased all the major parts of the then growing Bharat - the North, The South, the Military, the families, the couples, the friends, the uncles - all sorts who have enjoyed being astride on a Hero Honda. Including cricketers, who were a leading way of promoting brands in the early 2000's. Then came the Karizma with a very muscular and manly Hrithik Roshan flaunting its gorgeous curves on a twisted road. AFAIK, this was their 2003 ad campaign. Really helped sell a whole lotta bikes. Then came the Karizma R campaign : another reason why I took up motorcycles as my career. There he was, resting on a chair. A few biker baddies roll up on their dirtbikes and thrash his Sparkling Yellow Karizma R with mud, buy doing donuts on the mud puddles. He got his revenge, in a more, "Striking" manner (pun intended again).

The Karizma R was marketed as a manly bike, with hair-raising performance. Probably this mean machine might've been the kick-off point for most bikers on this forum, and they swear by the machine. Derived from the CRF230's engine, it was so good that the Japanese had taken it back to their land, stripped it out of the body panels, and had converted it into a flat track racer (search for : FTR223). This has been featured as a beginner bike and was a subject to endless customisations. Infact, the bike had been even featured in a video game : Tourist Trophy by Polyphony Digital, the makers of the world famous Gran Turismo Game series. As a matter of fact, it used the exact same game engine of GT4, just with changed models and interfaces.

Come 2009, the Karizma ZMR was launched. It was based on the ZMA, but with even sexier and appealing bodywork - but with a lukewarm rear section design. It included Honda's PGM-FI (programmed fuel injection) tech as a feature over the regular ZMA. The commercial was no less of stupendity and amazement. You'll find that video below this long post.

Half of the Indian girls and women back in 2006 got to go around freely because of their Pleasure scooter. A light, slim and zippy scooter, with gorgeous lady colors, and being flaunted by Priyanka Chpora, who went on to be known as the "Desi Girl" in the coming few years. Pleasure and the Scooty pep+ had a nice time ruling the Indian scooter industry until the Activa 2g came along.

Splendor+, Passion Plus, the Super Splendor, CD Dawn, CD Deluxe - the reliable workhorses for office-going dads with 2 teenage kids and a wife.
Achiever, Glamour, Splendor NXG - the workhorse for newly married guys, who liked to go out on weekend ice cream rides with their wives
Hunk, CBZ Xtreme, Ambition 135 - You were a bachelor with a sorted life and wanted something spicy to ride on everyday.
Karizma R - for serious enthusiasts and performance junkies.

There were so many instances of just beautiful print ads, gorgeous showroom brochures, and an amazing website. I was SOLD just because of their damned Flash animations. Such beautiful concepts, just to be lost to time. I have collected quite few of them, and I will promptly upload them here. I have a few stored in an external hard drive, so there might be another post just for them.

HHPP (Hero Honda Passport Programme) was heavily promoted by dealerships back then. Every owner received a Hero Honda Passport (which looked similar to an International travel passport) to keep track of the date of servicing, cost and points accumulated. The points could be redeemed to buy spares or win goodies. My father had got a silver heart pendant, with the Hero Honda logo engraved behind it. My friend's father had got a Hero Honda branded toolbox, with a bare minimum of required spanners and a screwdriver. Thoughtful of them.
This program has been rebranded to Hero GoodLife and no owner knows about it. Its just seen as a customary thing while handing over the documents.

In 2009, they released another ad campaign "Dhak Dhak Go - Move with Hero Honda" which was widely promoted by the brand ambassadors. It was a genius move, and still showed the promise of being a family brand.

2. The separation.

This was the story AFAIK. Honda wanted to use Hero Honda's existing facilities to make parts for their other domestic and international models - which Hero Honda had promptly refused. Hence the divorce. Damn it was a messy one.
Hero Honda went through a rebranding, similar to a teenager switching over to a new look after a terrible breakup. Honda went on to cannibalise Splendor's sales by giving useless updates to the Activa, went on to upgrade the Shine, and get a few more reworked Brazilian models and extort the hell out of us Indians. Just like Child Support in the case of any divorce, Honda agreed to be a technological partner till 2014. And from there on, things went downhill real fast. Bad quality of parts, reworking the same engine over and over like a mixtape degraded overtime, no real innovation - seems like they were stuck in a timeloop which they were unable to get out of.

3. The Concepts.

Auto Expo 2014 Delhi saw a handful of concepts from Hero that year. HX250R, Hero ZiR, Hero Hastur were among the notable ones.

Hero HX250R : a liquid cooled 250cc engine, a 6-speed gearbox, DOHC, FI, dual disc brakes, a funky looking swingarm, a beautiful looking speedometer with speed figures a Hero motorcycle could only dream of - this was supposed to be their Poster Bike. The ultimate dream package. An Indian slap in the face to the now revered, worshipped and legendary CBR 250R (i own one). Something that the Indian roads deserved from long long ago. Perhaps this is the best time to fill the void.
This beautiful machine didn't see the light of the day because their partnership with EBR (Erik Buell Racing) had fallen apart.

Hero ZiR : this was the supposed maxi scooter with a 150cc engine and a very Italian looking design - a bulbous front with an optional long windshield.
Well, we got a taste of what it could've been with the now Suzuki Burgman 125.

Hero Hastur : ohhh i'm gonna have a great time roasting Hero for this. It is supposedly a design exercise, which apparently featured a 600-something parallel twin engine - liquid cooled of course, a very Z-900-ish stying on the front, a very Duke 790-ish silhouette going on in the side profile. The engine inside the beautiful trellis frame was a wooden mock-up I think.

They did realise pretty fast that this is better off as a dream and not even a concept. Kudos to them for that.�� They were dreaming of a 600cc parallel twin, whereas they weren't even close to making a DOHC 250cc single a reality.
Perhaps, the power of dreams?�� (I'm not sorry at all for this pun!)

They even did showcase a diesel scooter which was capable of running as a generator, with a basket upfront - clearly aimed for rural usage. It was promising though.

4. The present - a desperate attempt to make money and milk a 28-year old cow.

Post 2014, there have been absolutely no REAL inventions, maybe the i3s system being a very rare exception. Splendor+ still made money, the glamour, passion, HF deluxe and dawn were all the underdogs. Pleasure's user base and prospective customers were going down due to product stagnation and rivals coming up with products light years ahead of these fossils (damn its raining puns here today). Maestro line-up was lukewarm at best. Achiever saw a reintroduction, and was axed promptly. A big funny joke had been made out of the Xtreme series. What was supposed to be a sporty commuter with an electrifying design, it saw 3 spinoffs and completely diluted the core values of the Xtreme badge. Lazy engines sharing architecture with other models added to the lacklustre attraction of customers - there were a handful of them for this particular model. Forget about the Xtreme 200S - its a blatant abysmal attempt to create a Gixxer SF155 rival.

The Xpulse can be considered as a win of some sorts. The Impulse 150 gave us Indians a taste of legal offroading machines which you can take to the office. I got to know that it was just a rebranded Honda Bros 160, just thrown to us Indians, like how a kind hearted schoolboy would throw Parle-G biscuits to a faithful Bholu kutta in his lane, on his way to school. Tagged as a transroader (that term aged quite badly), it could take the streets and trails with apparent ease. Came with dual purpose tyres.
It was an instant hit among offroad enthusiasts, and a few have resorted to plonking in the 223cc single cyl engine from the Karizma - and make a CRF230 of their own sorts. These swaps have been quite popular in Kerala, which makes sense because of their soft climate and trails.
The Xpulse's engine is a heavy rework of the Unicorn. Supposedly all this reworking and tinkering made the engine lose its reliability factor, a core component in its lifeline. The engine is plagued with fuel delivery issues, seizing issues, and a restricted top powerband, which the 4V head had helped a bit.

It's been too long of a post now, let's continue it in another segmented post.

[pranavshet]

Originally Posted by saitvsk23

It's been too long of a post now, let's continue it in another segmented post.

That was a great analysis mate. I will surely do another post on the same topic in detail may be in 2-3 parts. Keep them coming. It pains to see a brand that we were emotionally attached in childhood loose its shine.

[saitvsk23]

5. The ads - all of visual glory.

https://youtu.be/W7R0mZGqJ08

https://youtu.be/Ge_H_FIdLww

https://youtu.be/TtRzDgqGTgk

https://youtu.be/_myOLsvuqro

https://youtu.be/GssmSnKBF-c

https://youtu.be/z44vMNZwPeA

https://youtu.be/HI5MmRYqfWA

https://youtu.be/xAswylDu3Gs

https://youtu.be/1qNpYisp3zM

https://youtu.be/i0ZhYYSrf_8

https://youtu.be/1cEUg33o0VU

https://youtu.be/ig6Fok_MPwg

[saitvsk23]

Originally Posted by pranavshet

That was a great analysis mate. I will surely do another post on the same topic in detail may be in 2-3 parts. Keep them coming. It pains to see a brand that we were emotionally attached in childhood lose its shine.

I should thank you for starting that fire in me. Seeing a brand that was a household name, that dissolved slowly to be a brand which is mocked time and again., pains me a lot. Quite a lot. I have been as much diplomatic and parliamentary possible in my language so far. I want to keep it that way, out of sheer respect to this esteemed forum's rigid rules.

Else all hell would break loose.

For the mods : please increase the visibility of this thread so that someone high from the Hero management sees this. They might not take any action for sure, I just want them to see the fire in us motorcycle enthusiasts who idolised this once-reliable brand. It would be a great help for my post too.

Also, Hero and Honda are clear textbook examples of "what happens when the marketing department and a greedy sales chart takes over an automotive company".

PS : the XTEC, ATFT and ASFS branding on their bikes are pure gimmicks. The person who came up with the XTEC idea should be thrashed in front of the CIT. They should've named it the deluxe variant, would've made more sense. Much more sense. The digital speedometer, the bluetooth feature (an absolutely trashy trend in today's motorcycles) are considered premium. Hence being deluxe. Oh no, wait. They already use the Deluxe name for a mere commuter. Sorry for that.
I think they're happy with the way us sheep-herded Indians are flocking to their showrooms, hence their arrogance and laziness to act upon and bring something truly great and revolutionary.

God knows what potion they're cooking and churning up at the CIT, only to pour it all on an all new "Splendor+ Pro DLX XTEC XYZ 420".

God help Hero MotoCorp. God help Honda. God help us all.

[pranavshet]

The current hero management simply lacks the intent/capability. Their CEO just keeps blabbering about premium products being on design boards etc.

The fact is that they are not able to deliver a winning product even in their core commuter segment which is their strength. Their first attempt at doing that in form of ismart 110 was terrible to say the least. That particular bike was plagued with issues right from timing chain issues, head failure, engine rusting, etc.

The BS-6 commuter bikes are having weird issues like gearshifting, piston failure seizure etc. Is it because of low-quality components used in the engine or faulty engine design I don't know?

They lost a trick in scooters by not launching differentiated premium products. People don't even consider them as an alternative when buying scooters. At one point in time, they were No 2 in the scooter segment. But currently, they are gone case. The XTEC variants of pleasure & Destini are so weird. The performance from the in-house developed 110.9 cc & 125cc engines is average at best.

The problem with them is that they are afraid of failure. They are not giving a serious attempt to crack the premium segment. Even if the product doesn't do good, at least the R&D guys will get an idea about how their products are perceived.

After the 2014 Karizma ZMA/ZMR debacle they have shied away from launching an all-new platform in the premium segment.

All they have done is launch the modified versions of existing platforms.

The other issue with them is pertaining to the marketing of their products.
Getting their products endorsed by Big shot cricketing/ movie celebrities makes no sense.
The sales of the products should be driven primarily by the attributes of the products themselves. But in the case of hero, they depend more on celebrities and less on their products. Their recent marketing campaigns are hopeless. I don't know why normal people can't be involved in advertisements to make them realistic.

In the next post I will be focusing on dealerships and after sales aspect of hero.

Would love to know your take on this my dear folks. Till then take care and ride safely.

[karanbir.sandha]

I have worked for the company in a Field sales position and have seen them leading most of the markets, no matter which area I handled during my time there the market shares were crazy high, even as high as 65-70%. The real power of the company lies in its robust network that reached the remotest locations.
However, they were getting beaten badly in the urban and premium segments. no real-premium products to sell coupled with quality and manpower issues.

There is a big culture issue that I experienced there, Ass-licking is what gets you ahead in the corporate ladder, while this is true in most companies, at Hero this is the only way forward. Due to this lot of talented individuals just quit and move to better opportunities. The management is too old and there is no space for young people and ideas, this issue is going to be even bigger when the market moves to EV and they will be stuck in their decades-old work methods.

I wish the competitors catch up quickly and Hero Motocorp gets shown its place in the market.

PS: All this is so much in contrast to when I moved to North America and started working with Tesla, it's the polar opposite of what I had experienced in the automotive industry.

[sri_tesla]

It's a very good time to start this thread about the future of Hero Motocorp but surprisingly all the posts till now are missing the elephant in the room, which is "Electric vehicles".

• Traditional rivals like Bajaj and TVS launched their first EVs almost 3 years back and TVS already made huge upgrades to their EV while Hero just launching their first EV now, and is only available in just 3 cities. TVS is selling the iQube in around 100 cities and already clocked more than 10,000 sales in November 2022 with a target of reaching 25,000 per month by March 2023. That 25K number is already close to the total sales of Hero's all ICE scooter sales combined. TVS also announced that they are developing EV models for all the ICE segments and will release them in the market in the next 12 quarters (3 years). In addition, most of their future R&D spending and higher management focus will be concentrated on EVs as per official information.

• On the other hand, new startups like Ola, and Ather are taking sales from traditional companies like Hero, Honda, Bajaj, etc... Ola is already selling 20,000 EVs per month and Ather is selling around 8,000 per month. Every time one such EV sells, it not only takes the current sale from ICE vehicles of Hero or Honda but also takes more future sales as it gives a foothold to these new startups who are more aggressive in the market and also due to word-of-mouth marketing for EVs.

• This is just the beginning and these EV sales are growing rapidly and taking a decent market share despite being priced much higher than ICE vehicles and limited electric motorcycle options. Next year, Ola is launching a new scooter at a similar price to Active or Destini. They are also planning to launch an electric bike sometime next year. TVS is planning to launch 1 or 2 new EVs next year. With cost parity to ICE vehicles and much lower fuel/operating costs, these will take a substantial market share from petrol 2-wheelers in the next 1-2 years. In the next 3-4 years, EV 2-wheelers may take more than 50% market share.

• In such situations, companies like TVS which is very proactive in product development and planning will not only survive and thrive. But companies like Hero Motocorp, Honda, etc... will struggle to survive.

[Gildarts]

Hero is a goner. Hero has been too lagging in powertrain development. The change in Costumer perception is tangible. TVS Radeon is eating into Splendor+ sales. More people are looking towards electric scooters rather than 100CC motorcycles. VFM products like Ampere Magnus, etcs., are moving faster everyday. The stories of Hero and TVS are pakka case-study material.

[SKC-auto]

Companies which do not invest money rightly in R&D of future technologies will eventually go bankrupt. Hero is most certain to go bankrupt, I have less hope of even Bajaj(Global Indian selling platina in Africa) surviving the next decade.

TVS seems to be heading in the right direction after seeing some of their product launches. TVS said they will be selling 20K iQube's from July 2022, but lagging behind.

[Ritkon]

It is certainly a concerning development that I was not aware of. The engine, gearbox and reliability issues highlighted above by some of the members are also quite a surprise to me, as I always thought Hero made reliable bikes.

Would the members be kind enough to give the source, from where they came to know of these reliability issues and elaborate a bit more on them?

Many of my friends and colleagues own BS6 Hero bikes and none of them has faced any issues till now, barring some engine oil leakage problems.

[JShah]

Thank you for bringing to light a very important thread,

I really thought they will change the game with VIDA, But unfortunately they have brought in a product that will IMO not sell to the masses, They had multiple delays in Launching it and there are no signs of scaling it. They already have a premium product (Ather) with their associate then why not a mass selling EV scooter?

They have their well set distribution network thats second to none in the country, They have the manufacturing power and setup. I just dont understand their strategy. Pains to see a home grown brand starting to fail like this.

[Imran.Syed]

A close friend bought the Hero Maestro in 2014. To this day he curses at his decision to do so. Electrical and mechanical issues were imbibed in the critical mass seller scooter.

A few years later when the next gen Maestro was launched, I got one for my younger brother. It was a looker amongst a sea of plain-jane Honda Activas but the same issues my friend faced started cropping up in the next model as well. It was sold off soon after that.

At the same time we had a late 2010 Activa, which is still running flawlessly to this day (with regular periodical maintenance.)

Hero Motocorp is financially a very very strong and trustworthy company. But their sales/growth/profit margins have clearly stagnated, if not declined and this needs a Promoter level intervention.

[deerhunter]

Hero's story is essentially the same as our homegrown mobile brands like Micromax, Karbon, Lava etc. These mobile brands were just trading companies who sold mobiles designed/manufactured by Chinese OEMs. Their top management was also made up of just traders and there was no real innovators or visionaries at the top. While they tried to innovate, it was too little too late.

Same is the case with Hero. Their top management are just traders and not innovators, and have a license raj era mindset. They just sold Honda's designs and hoped that it will work till eternity. Without a complete shake up of the whole company, Hero is gonna go the HM/Premier way.

[ambandla]

Originally Posted by JShah

Thank you for bringing to light a very important thread,

I really thought they will change the game with VIDA, But unfortunately they have brought in a product that will IMO not sell to the masses, They had multiple delays in Launching it and there are no signs of scaling it. They already have a premium product (Ather) with their associate then why not a mass selling EV scooter?

They have their well set distribution network thats second to none in the country, They have the manufacturing power and setup. I just dont understand their strategy. Pains to see a home grown brand starting to fail like this.

Hero's investment in Ather is around 500 crores (approx??). For FY22, Ather registered a revenue of 408 crore (sales volume of 23000 units), with profit of 40 crores. They are now hitting 10k per month sales volume, expecting 5 times increase in sales in FY23. I would not be surprised if Ather starts buy back of Hero's share in Ather some time in 2023. As Hero is going to compete with Ather in EV, will Ather let Hero keep a third of their company share?