Hero MotoCorp creates startup for innovation; Munjal promises more scooters, premium bikes

HeroHatch is an incubation center that aims to foster innovation from within the organization

Under pressure to retain its iron grip on the domestic two-wheeler market, Hero MotoCorp has created a startup within the organisation to promote innovation and disruptive thinking.

The Delhi-based company which is India’s largest two-wheeler maker has set up HeroHatch, ‘an incubation center that aims to foster innovation from within the organisation’, Chairman and Managing Director, Pawan Munjal said in his address to the shareholders of Hero MotoCorp in the annual report.

“With innovation and new technology as two pillars of our vision, we have recently created an incubation center within our eco-system which functions like a start-up with mentors from within and outside of Hero. Aptly named ‘HeroHatch’, the incubation centre aims to foster innovation from within the organization,” Munjal said.

It is not unusual for large, multi-year old corporations to look at startups for business ideas and innovation. Tata Motors started TaMo, a ring-fenced start-up that was tasked to work on new ideas and technology which could be adapted to the mother company’s processes later.

Startups are praised for their agility and innovation which are often disruptive in nature. Large-sized companies often find it difficult to maneuver during challenging times which could lead to a fall in the competitive edge.

For Hero setting up a startup could help it keep competition at bay especially from Honda Motorcycle and Scooter India (HMSI), the country’s second largest two-wheeler maker and Hero’s one-time joint venture partner.

Hero has a share of 36 percent of the domestic two-wheeler market. it clocked sales of 7.36 million units last financial year recording a growth of 14 percent over 2016-17.

Honda, meanwhile, beat Hero’s growth with sales rising 18 percent to 5.77 million last year over 2016-17. Honda controlled 29 percent of the domestic two-wheeler market. Honda has declared its intentions of claiming the number one spot in India, the world’s largest two-wheeler market.

To maintain its grip Hero will be focusing on scooters as well as premium motorcycles for future growth in India. While scooters command more than one-third of the two-wheeler market buyers have steadfastly shifted to premium offerings in the motorcycle space.

“At Hero MotoCorp, we are cognizant of the latest trends and constantly equipping ourselves with new technologies to be able to stay ahead of the curve. Our engineers at the R&D centre at Jaipur are accordingly working on multiple projects of future mobility solutions, including a range of motorcycles with higher engine capacities, scooters and Electric Vehicles (EVs),” Munjal added.

To keep pace with demand Hero is adding a new green field facility which will come up at Chitoor, Andhra Pradesh. This plant, which will be its sixth manufacturing plant in India, will see an investment of Rs 1,600 crore and will be operational by December of next year.

“We recently commenced construction of our new manufacturing facility – at Chitoor in Andhra Pradesh – that is our sixth plant in India, in addition to the two facilities in global locations – in Colombia and Bangladesh. Once operational, the Chitoor plant will take our overall installed capacity to about 11 million units in the next two years. The new plant – our first manufacturing facility in South India – will enable us to enhance our operational efficiencies in servicing the markets in the region,” added Munjal.


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