We had recently reported to you about the volume of amount Hero MotoCorp was forced to pay their former business partner Honda. The depreciation did not prove to be a shot in the arm for the company as it had to pay more than what they had bargained for. However, that has not stopped them from realizing their dreams.

Now the company is planning to introduce new partners in their business. The company targets markets in Africa, South East Asia and Latin America. As far as the export goes, Hero MotoCorp had planned to start their exports in this quarter itself. But the high domestic demand and limitations on the production gave a setback to Hero. They will now start exporting from the 2012-13 financial year.

The new venture has been almost finalized and the planning for the new territories has been sketched up. It comes close on the heels of a strong domestic season where the bike maker sold more than 1.5 million units in each quarter. We have already reported to you in one of our earlier posts that the company had made profits to the tune of 43 per cent.

The company already has about 20 per cent growth in exports. But there is more into this. The auto maker is drawing up a plan where they can tap the opportunities in the markets in Africa and Latin America. Finalizing the business partners and building up a business model may take another six months for the company to actually see the plans materialize.

Hero MotoCorp is also planning to buckle up the production as high as 7 million units. The company currently can handle production of 6.2 million units per year. The target of reaching the 7 million units mark is set to be achieved by the end of the current financial year itself. Hero MotoCorp has plants in Manesar, Gurgaon and Haridwar.

It is likely that all the three plants will work extra to realize the production of 0.8 million units. The Haridwar plant has a current production capacity of 8000 units daily. It might go up to 9000 units per day. The strategy is there to see for all. The scooter production has already gone up from 35,000 units per month to 50,000 units per month.

Future certainly looks bright for Hero as they will soon be implementing their roadmaps that they have worked on so hard.

Last we had reported to you about the royalties paid by Hero MotoCorp to their Japanese partner Honda Motors. For the third quarter that ended on December 31 2011, Hero had paid Rs. 180 cr. as royalties. This process is expected to go on until June 2014 – according to the company’s license agreement.

The above information was included in the article when we wrote about Hero’s Q3 performance. The sales figures were fantastic for the company, especially in the subcontinent. But the profits had fallen for the company as they shared the same with Honda. Otherwise, the sales were magical.

However, in spite of the cozy news on one side, there is monitory loss on the other. This is due to the depreciation of the Indian rupee on the global level. This is expected to lead the Hero to something in the region of 24 per cent increase in the royalty payments they are doing to Honda. This is a huge increase that neither of the companies had expected at the start of this financial year.

But there is no need to worry for the Indian auto maker. This is a trend that may not continue for a long time. In fact, the payments might see a drop in the next financial year on pure expectations of the appreciation of the Indian rupee. As a matter of fact, the situation may change until the end of next three months – the last quarter of the fiscal.

The company has paid Rs. 180 cr. in the first quarter, Rs. 210 cr. in the second quarter. However, the third quarter was the most devastating for Hero as they had to pay an amount of Rs. 228 cr. This trend has been constantly on the rise. Hero is bound to pay Honda such royalties until the first quarter of the 2014-15 fiscal.

When Hero actually signed the licensing pact with Honda, it was worth ¥45,000 million (this is around Rs. 2,400 cr.).  However, the royalties which are expected to be paid in installments every year may see an increase of up to Rs. 670 cr. until the license agreement period ends.

If Hero has to pay the same amount it paid in Q3 in Q4, then the total sum of royalties will reach Rs. 846 cr. All the things will get cleared by the end of this financial year and how the rupee behaves in the days to come.

With a turnover of about Rs. 6,031 cr. Hero MotoCorp has recorded their highest profits ever for a quarter since they have parted ways with their long standing partner, Honda. This growth has stood at a staggering high of 43 per cent. This is the highest record in three month period.

There were many people who had written off Hero MotoCorp saying that it would not be able to sustain the competition without the support of Honda. But the net sales for the auto major rose by about 17 per cent during this period. The two wheeler sales for this three month duration had reached a staggering figure of 15.89 lakh units. On an average, the company sold more than half a million units almost every month in the quarter.

The company has set a target of selling more than six million units for the current financial year. It seems with such a strong third quarter, the company is well on course to reach the target. The EBITDA margin for Hero for this third quarter was recorded at 15.6 per cent. The cost of the raw material was put at Rs. 4,453 cr. which is up by 19 per cent.

The EBITDA margin was influenced by the high and constantly rising fuel prices, the high interest rates and the fall in the rupee value. There is hope that the demand for the two wheelers will remain constant in spite of these difficulties. However, the overall economic condition is going to play a major role in shaping the future course of action for Hero MotoCorp.

The factors might have made an impact on the profits by the company negatively. Hero MotoCorp gained a bit lesser than what they might have had settled for. But that was due to the fact that the company had to pay Rs. 180 cr. as royalty to their estranged partner – the Honda Motors. According to the license agreement, Hero is bound to pay a total of Rs. 2400 cr. royalty to Honda until June 2014.

In the meantime, the company is working hard on their Research And Development (R&D) wing. This will help the company go to the higher level and help in sustaining the hard competition in the market from all sides, including Honda now. Moreover, the auto major is also working hard on the Hybrid technology, which has a good growth in the days to come.

The Indian two wheeler company Hero MotoCorp unveiled a range of two wheelers today. The launch includes one scooter and two motorcycles. The scooter is already declared 110cc Maestro, while the motorcycles include the 100cc Passion XPro and the 125cc Ignitor. Anil Dua, who is the senior vice president, Hero MotorCorp (marketing and sales) said that this launch was their launch after parting ways with their long standing partner Honda Motors. Last year, Hero MotoCorp had launched Impulse – the company’s on and off road bike.

Bike enthusiasts must certainly be excited about the launch. But they will have to wait for knowing the price tags of all of the three bikes. There is yet no official word from Hero as yet. What the company has said is that they will announce the prices of the bikes at the time of the actual launch. Hero MotoCorp will be launching only the scooter later in the month. The bikes, however, will be kept in the wings and would see the light of the day in the next few months.

The Maestro scooter is capable of attracting customers of both the genders with its incredible features, the company feels. The bikes, however, are targeted towards the college going youth and office goers.

As far as the bikes are concerned, they have the technological support from Honda – Honda is bound to give the technological support to Hero for four more years in spite of their breakup. However, Hero claims that all three bikes are the result of their research and development. If one hand, the Maestro is equipped with advanced swirl flow induction system, on the other hand, there is the new generation advanced tumble flow induction technology engine for the Ignitor.

The bikes have been developed especially for the Indian roads and the Indian consumer class, Mr. Pawan Munjal, who is the chief executive of the company, said. He also added that these bikes will also serve the purpose of the company’s future plans.

The sales have reflected well for the Indian auto major as they were able to sell in excess six million motorcycles in the last year alone.

Markets like Southeast Asia, Latin America and Africa are high on the company’s agenda as Hero MotoCorp is targeting more and more of the markets. The company is targeting at least 10 per cent of revenue from exports alone. To increase the market in the foreign countries, Hero MotoCorp is also ready to invest in setting up plants, if the need arises.

A lot of cozy things have been spoken about Hero MotoCorp irrespective of its business ties in the market – be it with Honda or without it. The news and reports were also positive when the company’s first bike Impulse was launched. However, there are some such things that may not bring a smile on the Hero fan.

Whenever the monthly reports were out, they always spoke of the sales rising for the company. Well, those were the general sales, where the company is indeed performing well. However, when it comes to premium bikes, things certainly are not going Hero’s way.

The reason of concern for Hero is their premium bikes. Bikes like Karizma, Hulk and CBZ are bearing the brunt of the hot competition in the Indian two wheeler market. Even the Impulse, the bike that falls in the 125cc category is no exception. There have been very negative effects on Hero due to the heavy competition from all quarters in the market.

The sales for the company have gone down by as much as 30 per cent. And it took just 11 months for this to happen. That is a real cause for worry. Hero MotoCorp came into being after their famed split with their Japanese counterpart Honda Motors. The split took place in December 2010 and since then the sales have just gone down for the company.

No doubt, it has been a very bad year for the company. When on one hand Hero sold 34,116 units in January 2011, the sales dropped up to 23,860 until November 2011. The other part of the growing worry is the fact that, the competitors of Hero are growing in their sales as many as two times.

Bajaj Auto for one, have had a good year. In January they had sales of more than one lakh units. Until November, the sales increased up to 1.34 lakh units. Honda, Hero’s arch rival now, has recorded sales of 59,267 units in the last month.

For Hero MotoCorp, sales have decreased in both the 125cc and 250cc segment. Interestingly, these two segments are seen as the fastest growing bike categories in the Indian two wheeler market.

As reports are pouring in for the last month’s sales HMCL is also one of them to report its positive side of the story. Hero MotoCorp Ltd (HMCL) has come up with figures that are the highest ever for the month of November, for the newly independent two wheeler company.

The company registered sales growth of more than 27 per cent. HMCL had sales of 5, 36,772 units in the last month. In the same month last year, the company had sold 4, 21,366 units. This is a huge growth of 1, 15,406 units. The Impulse bike from the company, which was the first ever bike launched independently by the Hero Group proved to be a huge success contributor.

Since April this year, the company has sold 41, 22,902 units. For the same period last year, the company had sold 34, 46,602 units. This mean, the sales have increased by 6, 76,300 units. It has been four months that the company has been clocking sales more than five lakhs. The 27 per cent growth is certainly a part of those efforts.

October 2011 had also proved to be a record breaking month for the company. The month saw record retail sales for HMCL. The company has said that they will be targeting launching new bikes to keep up the tempo of the sales that they have been able to maintain for the last four to five months. To materialize the target, the company is also targeting to expand their network wherever possible and keep a good focus on communication as well.

In less than one year from its official separation from Honda Motors and the launch of their first ever bike, the company has gone on to achieve the SAP ACE (Achieving Customer Excellence) Award. Among many awards, last month, the company also got the EMC Cloud Pioneer Award 2011.

The Hero Honda Pleasure model has been tagged as the one for being targeted specially for the girls. This is one thing that has put off many boys as they feel it is vehicle that does not behave of the boys to ride it. The reason for such a thought to arise is because many people feel that Pleasure has the almost same capacity as Honda Activa and Honda Dio.

But nevertheless, the vehicle is equally loved by both the boys and the girls, given the fact that the model is a performance oriented one. Pleasure falls in the Scooterette segment. It has a top speed of 77 kmph. It is a powerful bike with a displacement of 102 cc. The four stroke engine comes with air cooling system. Pleasure develops high power of 7 Bhp at 7000 rpm and generates a top torque of 7.85 Nm at 5000 rpm.

The bike is a pleasure to drive indeed as it has a very smooth pickup. The acceleration is smart enough to keep the bike smoothly moving. Another feature why it is easier for the females to use it is because the bike is free of gears. As a matter of fact, there are automatic gears installed in the bike and they change according to the speed of the vehicle.

The 102 cc bike is comparatively lighter with a total weight of 104 kg. That is why it is easier for the college going girls to handle it. The ground clearance of the Pleasure is 125 mm. As the bike is expected to be used in the city limits, it has a low fuel capacity of only 5 liters. Taken into account the displacement and the power of the vehicle, the fuel tank could have been a tad larger.

The fuel tank sits pretty under the seat which is one single piece without a step-up seat. Under the seat of the bike, there is enough room to place your things like a small carry bag. It can fit in itself a helmet fairly easily too.

The wheelbase of the Pleasure – 1240 mm and the wheel size of 3.5 X 10 – 3.5 X 10 mm is enough to give good support while driving in the crowded city places. The tubeless alloy wheels make your riding experience a pleasurable one without the tension of thinking of getting your tyres punctured.

The length of the bike is 1750 mm, the width is 705 mm and the height is 1100 mm. The pass-light and low fuel indicator exists as the features of the bike. However, features like the low oil indicator, low battery indicator and high oil temperature indicator are missing from the features line up.

However, the fuel gauge and the speedometer come in the analogue form. And now finally, let us come to the safety features. For the front suspension, there is the bottom loaded with springs and swing arm with spring is for the rear. As for the brakes, both the front and the rear brakes are inclusive of internal expanding shoe type.

Hero Honda Pleasure Price

Rs. 42,172/-

Hero Honda Pleasure Tech Specs

Engine Type     Air Cooled, 4-stroke Single Cylinder OHC
Displacement (cc)     102
Max. Power (bhp)     7.8
Max. Torque (Nm)     7.85    
Starting     Self Start
Ignition     CDI
Front Suspension     Bottom Link with Spring Loaded hydraulic damper
Rear Suspension     Swing Arm with Spring Loaded hydraulic shock absorber
Front Brake     Internal expanding shoe type (130mm)
Rear Brake     Internal expanding shoe type (130mm)
Front Tyre     3.5 X 10 – 51J/4 PR (with Tuff UP Tube)
Rear Tyre     3.5X 10- 51J/4PR (with Tuff UP Tube)  
Battery     12V, 4Ah
Fuel Tank Capacity (litre)     5  
Ground Clearance(mm)     125
Kerb Weight (kg)     104

It is the first quarter after the famous split between the Hero Group and the Honda Motors. After the split, both companies parted ways and tried their best to gather momentum in the business after their 26 year old partnership. There was no mercy either for Hero or Honda, for the other former partner. It was certainly a cut-throat competition.

However, Hero MotoCorp is slowly coming back to the good old days. It has been a remarkable comeback by the Munjal Group. The July to September 2011 has been a soothing opening quarter for the Hero Group minus the Honda Motors. Of course, these are recovery days for the Hero Group and under the leadership of the Munjals, the company is progressing well.

After the split materialized, the shares of the company fell from a healthy Rs. 2000 to below the Rs. 1400 mark. That was a tremendous nosedive. However, the Munjals, with their efforts have again taken the share price to the good old healthy level of over Rs. 2100. It seems back to square one now.

However, the battle is not won yet. It is only the resurrection that Hero has been partially able to do. But the real test for the company will begin in three years’ time. After 2014, Hero will no longer get the technology support that Honda is giving them now. So whatever the progress they make after 2014 that will be the real credit for Hero.

As far as the current progress that Hero has made, they are expected to register sales in access of 27 per cent. Apart from that the company also plans to expand their plants. The plants will go fully operational from the next year. The company currently produces around 8000 vehicles every day. Over the next half an year, Hero MotoCorp is targeting a production of 9500 bikes on a daily basis.

Of late we have been reporting to you about the developments about the Hero MotoCorp. Just recently they introduced the Impulse – the first officially fully branded Hero bike. Work is also on for the launch of Maestro. It seems work is in full swing for the Hero MotoCorp. They have now come with yet another announcement.

No, it is not of any new bike yet. But in fact it is the confidence of the Hero Group that is speaking volumes for them. Hero plans to double their production in the days to come. The main aim of this is to try to grab at least 25 per cent of the Indian market share in the two wheeler category. This in itself is a big task they are setting for themselves.

In the expected rise, the company is planning to produce twice as many scooters as they are now. The double rise could come from the company’s three fully operational plants. These three plants collectively produce around 6.4 million vehicles per year.

However, it will be a step by step increase in the expected production. The auto maker plans to increase the production at their Haridwar plant by 1500 units by the end of this financial year. This plant currently produces 8000 units. It was the increase in the sales coupled with good buying demand that is making the company take these steps of increasing the production.

The other two plants of the company which are at Gurgaon and Dharuhera are also likely to speed up the operations to increase the output sooner than later. According to the company statement, they would be working in three shifts – 24 hours a day to buck up the production. That would give the Hero Group a cumulative production of at least 7 million units annually.

As if this was not enough, the company is planning to invest around Rs. 500 crores to establish their fourth plant. It is expected that the plant will be operational in the middle of 2012.

Yesterday we had reported to you about Hero MotoCorp’s first very own bike – the 150cc Impulse. After Impulse, the company is also targeting the launch of another fully Hero branded bike called the Hero Maestro. It will be actually a scooter in the 110cc category.

The company now wants to make their foundation stronger in the scooter segment as well. That is why there will be the launch of only one bike – the Impulse followed by the Maestro. No wonder, Hero MotoCorp are trying to prove that they can even rule the scooter segment as well. The work on Maestro is certainly powered by the good response their other scooter is making.

We are talking about Pleasure. The bike resembles Pleasure in many ways than one. However, there are some technical differences that put these bikes apart. The colors available for the Hero Maestro are Pearl Fadeless White, Panther Black med, Maestro Blue Met, Force Silver Met, pearl Harvest Green and Candy Blazing Red.

The urge to have one more vehicle like the Pleasure has been seconded by the good response to Pleasure. However, Hero Maestro can safely be called the upgraded version of Pleasure. But it will not only be the Maestro that Hero MotoCorp is working on. The next three years will see similar launches from the house of Hero MotoCorp.

To make things easier for the customers, the company is also planning to come up with more service points to make the after sales services easier for the customers.