Interview with Sanjay Singh

Vice President—Corporate Planning, Hero Motors

Date: 03 Jan 2012
Sanjay Singh, Vice President—Corporate Planning, Hero Motors

Company Description: Hero Cycles entered the Guinness Book of World Records in 1986 for manufacturing the maximum number of bicycles. The top rank has since then been maintained by the company. In 1999-2000, it hit another milestone by producing more than 5.1 million bicycles. Currently, the company is producing as many as 19,000 bicycles per day and exporting them to more than 75 countries worldwide apart from catering to the needs of domestic market. The manufacturing facility is located at Ludhiana in the State of Punjab. Hero Cycles is part of the Pankaj Munjal-controlled Hero Motors group.

 

Has Hero Cycles plant always been running at full capacity, considering that the company is the leading cycle maker in the country?

This company has been in existence since 1956 and today we are the number one company in the world. As far as capacities are concerned, we have been running at optimum capacities. Ours is among the best supply chain managed companies. Today we are manufacturing 19,000 bicycles a day. O.P. Munjal has been the pioneer of the group who started this cycle business in 1956. Today this group comprises Hero Cycles as the parent company. Then we have Hero Motors which is into automotive. Then we have a joint venture company by the name of Munjal Kiriu. Kiriu is part of Sumitomo group of Japan. Then there is ZF Hero Chassis Systems which is a JV with ZF Lemforder  of Germany. Of late the group has also diversified into hospitality. We are soon to announce a new company branding and a nomenclature.  In January 2012 we shall be able to finalise this.

 

How has the progress been for Hero Cycles in terms of the number of cycles sold? The company has figured in the Guinness Book of World  Records too for being the largest manufacturer of cycles world-wide.

It has always been a positive growth for the company, except during the 1990s when there was an industrial stagnation in the country for a few years. The company was recognised by Guinness in 1986 for being the largest manufacturer of cycles. Since then, we have been the largest single brand in bicycles.

 

The last decade has seen a very positive growth in motorised vehicles. Has this in any way dented the sales of cycles?

The automotive industry growth does not in any way affect the sales in the cycle industry. The two industries are not linked in any way when it comes to demand for the products. The two industries cater to two different products and two different customer segments. The cycle industry has been evolving like any other industry. The plain looking black colour cycles are giving way to fancier cycles. All this has only led to increased sales for the cycle industry. Today the size of the cycle industry is approximately 15.5 million units per annum, out of which we contribute 5.5 million units. The industry is led by four leading players and there are a lot of other smaller ones too.

 

Every industry has seen a major evolution in terms of technology, design, styling etc. Has your industry too witnessed such a radical change over the years?

This industry is no different from other industries. The law of change applies here too. The conservative looking black cycles have given way to more stylish cycles. The cycle industry is segmented according to the different types of cycles. First is the standard segment which is also the mass segment and here the cycles are usually the black basic cycles. A notch above the standard is the fancy segment.  Here the products are related to lifestyles and fashion and these come in different colours. The third segment is the mass premium. This segment is known more for its performance.  Then there are mountain bikes and a super premium bike category where the bikes cost upwards of Rs.20,000 and go beyond the 1 lakh price tag. But here the volumes are very limited. We have leadership in mass and fancy. We have forayed into the premium segment.  The growth rate in this segment is higher compared to the mass segment. After the evolution in the automotive industry, it is the turn of the cycle industry.  The standard cycles cost around Rs.3,000. The fancy bikes cost above Rs.3000 and go up to Rs.6000. Premium cycles cost anywhere between Rs.4000 to Rs.15000. Above this comes the super premium. Standard and fancy segments constitute around 40pc of total sales.

 

Imports of premium cycles are happening big time in India. Any plans to enter this segment?

Hero has its own established brand images. These imported bikes are operating in a small segment but Hero has a wider reach. We are now entering this segment.

 

What about exports?

Around 10 to 15pc of our sales constitute exports. Different companies have different requirements for cycles depending on the terrain. One cannot generalise the exports of cycles. Our models that are exported are market specific. If your look at our neighbouring countries, our black cycles as well as mountain bikes are popular. In Africa they prefer only black cycles. In Europe and USA, it’s all modern looking cycles. Incidentally our high-end bikes do not match the low-end of products in the UK, for example. As an industry we need to upgrade. That’s a very positive sign because it means lots of opportunities for us to evolve. Even in the automobile industry you will see a similar phenomenon. The regulations in Europe are far too stringent compared to the ones in India.

 

By 2015, you plan to double your manufacturing capacity? You currently have a 48pc share and Rs.1,700 crore turnover. Do you intend maintaining your share in 2015?

Yes, we hope to increase our market share at that time. Our turnover too would increase. The industry is going to grow at a moderate rate. If you see the penetration level of cycles in Europe it would be 50pc, China it is 43pc. In India it is 25pc. There is a huge potential in the country.


Tags Sanjay Singh Vice President—Corporate Planning Hero Motors


Related Posts
Sanjay Singh
Date - 03 Jan 2012

Vice President—Corporate Planning, Hero Motors





Contact Us

For Marketing, Sales and Editorial Contact:
editorial@motownindia.com
Ph: 9958125645

Registered Office:

Motown India
4058, D-4, Vasant Kunj,
Opposite to Fortis hospital
New Delhi - 110070

© 2025 MotownIndia - ALL RIGHTS RESERVED
POWERED BY - VIDYA SOFTWARES