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  • Hero MotoCorp is losing in slow motionT Surendar
    Hero MotoCorp is losing in slow motionOn the face of it, Hero Motocorp’s well-oiled business machinery doesn’t look as if it is missing a beat. It sells nearly 2 million more two-wheelers of all sorts every year than its nearest local competitor, Honda Motorcycle & Scooter India Pvt. Ltd. It’s easily the leader in motorcycles, which account for two-thirds of the total two-wheeler market. The company makes over Rs 3,000 crore a year in profit, has Rs 4,000 crore in cash and liquid holdings and much more in reserves, and is debt-free. It’s also got the best return on capital employed of any Indian two-wheeler company. Under the surface, however, the company is in a constant state of churn, which may be what prompted chairman and CEO Pawan Munjal to lay his cards on the table at a meeting with dealers and analysts in February, preempting any negative feedback. Since September 2018, Hero MotoCorp has seen a series of senior management exits. The chief technology officer, Markus Braunsperger, quit after his five-year contract expired in July last year, while the sales head, Sanjay Bhan, resigned in November. The company has seen four sales heads in five years. Two other senior members from the top 10 also left in the past year and several others were re-assigned roles. Hero’s performance over the past five years or so has also broadly left analysts unimpressed. The company has struggled with a reputation for a lack of technical capability, despite embarking on a big transformation project in 2016, with the Rs 850 crore R&D project setup in Jaipur coming a year later. The idea was to move into the new fast-growing areas of the market—scooters, premium motorcycles and exports—that the company had hitherto ignored. Its efforts have borne little fruit. Hero’s scooter market share has fallen to single digits and its products have had teething technology issues. Ten years after it broke off its decades-long partnership with Honda, Munjal’s strategy seems to be stuck in time. Sign in to read more.
  • How the world’s biggest two-wheeler market collapsedAshish K. Mishra
    How the world’s biggest two-wheeler market collapsedThis is the first edition of Things Change, The Morning Context’s weekly newsletter. Things Change will land in your inbox every Thursday with sharp, original insight on subjects making the news, but which must be understood better. It will be written by the best writers and subject experts, both in-house and external. Let’s cut to […]
  • Manesar and the anatomy of a slowdownPradip K. Saha
    Manesar and the anatomy of a slowdownManesarYou should have led with the king of spades and not saved it for later,” Nanku tells Chauhan. “Have you forgotten how to play?” Chauhan smiles sheepishly while shuffling the cards, a half-lit bidi perched between his lips. Chauhan deals. Nanku falls short again. He is livid. Only one man, Sawant Singh, who’s in the lead, seems to be enjoying this banter. It’s past noon in Aliyar, a village near Maruti Suzuki India’s manufacturing plant in Manesar, and men are concentrating hard on the game at hand. They’re playing Call Bridge, a four-player card game popular in these parts. Behind the men lies the village market. Fresh produce is stacked alongside the limp and rotting stock from before. There are no buyers. Vendors take turns to play cards. “There is no work. Thousands of our customers have been fired from jobs. What are we supposed to do?” asks Nanku. Villagers are still in shock. They don’t know what triggered such massive layoffs at companies. Or when the migrant workers will return, if at all they do. It’s like a game of Call Bridge—the industry and the government have made calls and fallen short.
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