This story is from December 2, 2006

Hero set to enter car-making, retail

Byas Anand / TNN / Dec 2, 2006, 01:51 IST

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The conservative yet diversified Hero Group is turning a new leaf.

NEW DELHI: The conservative yet diversified Hero Group is turning a new leaf. As part of plans to expand portfolio, cycles-to-infotech Hero group is now preparing a new growth blueprint which includes forays into manufacturing cars and auto components besides entering the high-growth organised retail market.
Strategies for these diversifications are currently being finetuned and most of these new ventures would be in place over the next 2-3 years, Pawan Munjal, managing director of the $2-billion Hero group's flagship company Hero Honda, said.
"We have been known to be a conservative group, but now we are becoming more aggressive in the market. Having consolidated our leadership in the two-wheeler market and made an impact in the infotech sector, the Hero group is now looking at new opportunities across various industries," Munjal said.
A foray into manufacturing passenger cars is among the new strategies that's currently on the burner, he said adding: "We are looking around... As soon as we get a good partner and a good product line, we will foray into this segment."

This would mark a second coming for the Hero group in the car-making business. More than half a decade ago, the group had joined hands with Germany's luxury marque BMW to enter the car market. However, the project was shelved after a detailed feasibility study stated that the market was not yet ready for such premium cars. "The (car) project didn't look feasible then. But now, it's different. We surely have a four-wheeler foray on our mind," Munjal said.

The Munjal family's proposed car venture, industry watchers said, is expected to look at targetting the entry-level segments in India to take on the likes of Maruti, Hyundai and Tata.
Like its counterparts in the Indian automobile industry, the Hero group is also now getting into the business of producing automobile components. And acquisitions, Munjal said, would be among the preferred routes for expanding its footprint in the auto component market.
"Till now, we have been producing components for mostly our internal consumption. But now, we have decided to look externally and build our presence in the component sector, both through the organic and the inorganic routes," he said.
The group is in the process of finetuning its strategy for the component market foray, which would cater to both two-wheeler and four-wheeler industries.

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