The choice of Manchester, explains Pankaj Munjal, was made as a consequence of the city tradition: it is the beating heart of technology and computer innovation, e.g. the graphen molecule research was carried out there (the insights about graphene were worth the Nobel Prize for Physics in 2010 for two physicians of the Manchester University).
The World Bank recognized Munjal’s company, founded in 1945, as corporate policy behavioral model. In order to get access to the bike market in India, the biggest motorcycle manufacturer on a global scale, i.e. Honda, during the ‘80s decided to merge with Hero Cycles, acknowledging the company importance in the whole value chain – production, distribution, management – and the extraordinary organizational skills of the family, who after forty years could brag about not having a single day of strike in the company. “What made Honda approach Hero was the philosophy and the group value”, said the CEO of the new-born society Hero Honda.
Today Hero Cycles produces full suspension mountain bikes, traditional city bikes, majestic electric bikes, bikes for kids, girl’s bikes with baskets, timeless BMXs. Bikes for every path and every need.
Bicycle prices are increasing, together with technological and material innovation, making the sector create a sort of luxury niche: In 2015 the bike average price in Netherlands was 914 euros, in the United Kingdom was 300 euros, according to the data released by the European Cyclists’ Federation. Also Hero will inevitably aim at a high market segment, through more and more sophisticated and upscale products, and, also because of this, factory opening in the old country appears to be increasingly important: “You just cannot manufacture a Porsche in a Skoda factory”. Said Mr. Munjal.
The bicycle globalized market, where the developing countries are imposing on specific sectors and old manufacturers are struggling against competitive prices, has to face fiscal fights and commercial barriers. “The anti-dumping duties come too late”, said the chief of Avocet, a company partially outsourced by Hero Cycles, referring to the fact that the taxes imposed by the EU on Chinese bicycles, for instance, have been set at 43%. By adding to that the increasing transportation cost – Hero exports in Europe, Africa and America – it is clear that also from this standpoint the need of starting the production in the United Kingdom is getting urgent.
In 2015, Hero Cycles found also a new face embodying the company, the one of a Bollywood actor. The Indian movie star Arjun Kapoor has become the brand ambassador: “We are excited because a young icon such as Arjun Kapoor is now linked with us and will represent our brand and its ethics in the media world”, said Hero Cycles’ co-president. The company image turning point coincided also with the decision of launching itself into the online market, so as to make the bikes’ purchase easier and more convenient for clients all over the world, who, with a click, can access its products.
Since Hero Cycles was founded – by the four Munjal brothers who used to live in a small town which is now part of Pakistan – it understood where the market would go, managing to make a streak of right decisions, never faltering and undermining the original philosophy: looking at the past to improve the future, a future seen as a chance to seize or even to pre-empt. The fact that Hero Cycles bravely shows no worries about the Brexit may be read as a positive sign, and the negative economy forecasts about Great Britain’s decision to leave the European Union may have been too dull. Perhaps, Europe is going away from Great Britain, yet India is approaching.