Tension is brewing in the Munjal family with Naveen andPawan Munjal heading for a confrontation over the use of the Hero brand forelectric vehicles.
Naveen Munjal, themanaging director of Hero Electric, said he is ready to fight uncle PawanMunjal-led Hero Motor Corp if it enters the electric two-wheeler space underits namesake brand. The two companies are market leaders in their respectivesegments.
Hero MotoCorp, the largest manufacturer of two-wheelersin India is readying its entering into the electric two-wheeler space in FY22.Hero Electric, which is the market leader in the electric two-wheeler (E2W)segment, is ready to go all out to block Hero MotoCorp’s entry.
Naveen Munjal,Managing Director, Hero Electric said, “We are not worried on that account atall because there is a very clear agreement within the family which happenedwhen we did the restructuring in 2010 on how the brands are going to be used.There was no non-compete (clause) as far as product segments are concerned,which means anybody could get into any segment but there exists a very strongnon-compete clause for brand usage.”
In April, Hero MotoCorp joined hands with Taiwan’s Gogoroto develop Hero-branded electric vehicles (EVs) for the Indian market. Inaddition, Hero MotoCorp has been working independently on EVs at its R&Dfacilities. The first of Hero MotoCorp’s EVs are set go on sale before March2022 under the ‘Hero brand’.
“Environmental products, green vehicles and electricvehicles; those remain with us. Should anybody venture into, we will have totake our own necessary steps, whatever that is available to us by law. We arevery clear on not just the spirit of the agreement but even the wording of theagreement. There is no ambiguity on it,” Munjal added. Though Pawan Munjal’sHero MotoCorp declined to provide details of its product strategy for thefuture it said ‘it will act based on the legal advice’ available to it.
“There is a familyunderstanding, which everyone in the Munjal family is well aware of, andeverything will be done within those parameters of both understanding andagreement. This remains a role model of a family agreement. Hero Moto Corp iswell aware of its rights and as always, will continue to act based on the bestlegal advice. We never comment on speculation either of our business strategyor products that we may launch in the future,” a Hero MotoCorp spokespersonsaid in an email response.
Hero Electric, which has a market share of about 42percent, has about 13 products in its portfolio, making it the widest productportfolio among E2W companies.
"It was a surpriseto us when Hero MotoCorp announced its plans to come out with electrictwo-wheelers under the Hero brand. We will take all necessary steps availableto us at that point in time should something like that happen. There are noback-channel talks within the family on this,” Naveen Munjal added.