What the hell is Hero?

It wants to buy Ducati, but where has Hero come from?

Posted: 9 March 2012
by Visordown News

UNLESS you've spent time in India, as a motorcycle brand Hero probably doesn't mean much to you. But now it wants to buy Ducati and everyone's ears have pricked up. Is this a safe set of hands? Does it really have the money? What, in short, is Hero all about?

Until a year or so ago, Hero was a joint venture with Honda, effectively acting as the firm's arm in India as Hero Honda, with its own range of bikes, production facilties and everything else. But during 2010, with Honda keen to take full control of its own Indian operation, the firms split, leaving Hero as a stand-alone brand.

Here in the west, we tend to see Honda as being all-powerful when it comes to bikes, but the reality is that in terms of pure numbers of bikes made, Hero is actually bigger. And its rate of growth has been beyond belief.

Created in 1983, it's first bike didn't appear until 1985. Starting small – around the size of Triumph today – the firm took until 1987 to make its first 100,000 machines. By '91 it had made 500,000. It passed the million mark in terms of total production in '94. Still pretty low-key stuff, really.

But since then its growth has gone off the chart. It took a decade to make its first million bikes, but only four years for its second million, passing the mark in '98. Two years later, in 2000, it had doubled again, with total production passing the four million mark. A year later, in 2001, it became the world's biggest bike maker in terms of volume. Sales passed seven million in 2003, and by 2004 it was making more than two million per year, passing the 10 million total in the process. It now makes more than five million bikes every 12 months, its total production since the firm's inception somewhere north of the 40 million mark.

More than that, its earnings just seem to keep rising. The firm's most recent annual report puts its sales up 12.5%, income up 17.3%, profits up 14.7%... All this while the most of the world's bike industry is trying to keep its head above water. Can it afford Ducati? Yes.

OK, so presuming you've been brought up on a diet of western or Japanese bikes, you're probably not going to be too excited about any of Hero's products.  We're talking small, air-cooled, single-cylinder machines, mostly with drum brakes and primitive styling compared to the sophisticated machines we're used to. But when you look at how fast Hero has moved in terms of ramping up production, it becomes easy to see that in a few years it could easily be challenging the established brands in terms of technology, too.

While it still has some technical co-operation with Honda, Hero's recent moves have been all about building a base of technical knowledge to draw upon. In the last couple of weeks, as well as throwing its hat into the ring when it comes to wanting to buy Ducati, the firm has hooked up with Erik Buell, sponsoring his firm's race efforts and getting technical and design help in return. Ducati, with its expertise in chassis, engine and electronics, would be a way to get instant access to the latest technology once Honda has gone its separate way.

Would Indian ownership harm Ducati. Some would be sure to baulk at the link between Hero's budget bikes and Ducati's thoroughbreds, but fellow Indian firm Tata – owner of Jaguar and Land Rover since 2008 – has shown that with a light touch and plenty of investment it's been more than able to do justice to the heritage and appeal of the cars made under those brands, seeing a big growth in sales and profits as a result.

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Discuss this story

If talking about Hero & Ducati you should keep in mind Bajaj & KTM. There the indians bought only a part of KTM and now KTM has small capacity bikes (125cc Duke) that they use to get a foot into the worlds biggest bike market and to get Europe's youth back on two wheels. Maybe something simmilar happens when Hero meets Ducati... Maybe a 125cc Monster?

Posted: 09/03/2012 at 15:38

Tata bought Land Rover and Jaguar and the brands survived. No reason to think Hero buying Ducati would be anything but good news.

Posted: 09/03/2012 at 16:07

I don't think any harm would come of it. Ducati could out-source some manufacturing to India, like Triumph do to Thailand, to keep costs down.
The only downside would be for Ducati snobs not wanting their bikes to have diluted Italian bloodlines. I've met a couple of RangeRover owners with the same attitude.

Posted: 09/03/2012 at 16:28

Unfortunately, your report is not correct.
While in India Hero is indeed the largest motorcycle producer, globally Honda is by far the largest motorcycle manufacturer, producing more than 10 millions small and big motorcycle per year in factories in Japan, India (more than 2 millions units annually), Indonesia (more than 4 m units/a), Thailand, Vietnam, Europe, Brazil etc. and even Nigeria.
So not only the annual production figures, but also Honda's cumulative production figures far exceed those of Hero's.
Obviously, Honda is also the technological leader regarding motorcycles, unlike Hero which (still) depends on outside sources (formerly Honda).

Posted: 09/03/2012 at 22:34

5 Million drum braked, single cylinder engined bicycles does not a major manufacturer make. What a shame if Ducati is bought by a company making 3rd class motorcycles in a third world country.

Posted: 10/03/2012 at 13:26

I am ready for an EBR 250RS and Ducati is ready for a billion Euros.

Posted: 10/03/2012 at 20:54

Hero Motocorp is the largest manufacturer of motorcycles in India, they have a fifty percent of the total market sales in India. The extent of their offering is to that of a the Honda 223cc OHC with fuel injection, the market in India is evolving the middle class is expanding and they crave more. KTM and the 200Duke proves that, made in India and selling for under $3,000.00 USD conversely you can get a Ducati in India they offer a model manufactured in Italy and assembled in part in Thailand, it costs $13,500.00 and is a lesser version of the M795 Monster selling for $8,750.00 in the US.

The Market in India is huge and evolving rapidly, simply having operations in India would be lucrative to Ducati to access that giant market competitively, that being without duties that drive import cost up. They also could benefit from the giant distribution and supply channels already in place. The biggest benefit would be the capital that Hero has, it basically can reset Ducati and in that they can develop new models. The new models could be one that would hit the sweet spot in India, like the KTM 200 Duke and also the fourth coming KTM 350 Duke.

All I see is a WIN WIN if handled correctly.

Posted: 11/03/2012 at 17:43

@ Tomasso - Ride a Bajaj Pulsar 200NS buddy...then we'll talk about you calling India a 'third world country'. By your name, I assume you're Italian/Italian origin...your so-called 'first world' country cant seem to hold on to its companies, can it?? Open your eyes and smell the Asian coffee kicking European ass!

Posted: 12/03/2012 at 06:50

I don't think this is going to affect Ducati's products at all. Chinese companies own Rover, Volvo in the car world to name a few as well as Benelli Motorcycles. Speaking of Benelli, their takeover by Chinese motorcycle QJiang hasn't made one bit of difference to their product range and all their bikes are still manufactured in Italy. There doesn't even seem to be any technology transfer as Qjiang has recently released its first big bore street bike powered by an inline-four engine possibly copied from a Yamaha R6.


Posted: 12/03/2012 at 14:34

It hilarious how statistics are presented in this article.
India was a predominantly a scooter market until the late 90s. Bajaj Auto had access to produce Vespa under thier lineage, though the only grand motors we had were the old school 2strokes ranging from small kawasaki 100s -125s to Yamaha Rx100s to RD350s, and yes the Royal Enfield and Yezdi.
What the hell is Hero?
- They are a company who changed the whole game in a scooter dominant market
- They are a company that evolved from their humble roots as a cycle manufacturer and transitioned into a motorcycle manufacturer
- They were the first to introduce 4 strokes machinery in India
- They changed a freaking industry, today scooters are a small segment in India
- They are still the most popular fuel efficient motor makers in this part of the 'world'
- They bailed out Honda during the economic meltdown when every Japanese manufacturer felt the heat. It was then that Honda decided to extend its joint venture with Hero for a few more years

Every Japanese manufacturer in the so called third world JV has prohibited the deprived partner from having its own R&D and that holds true for Bajaj - Kawasaki, TVS - Suzuki, Escorts - Yamaha, Hero - Honda. It was under these circumstances that hero had virtually no technology off their own except for state of the art assembly lines and supply chains. Bajaj and TVS culled the JV as they weren’t doing as good as Hero was, Escorts got squashed.

This write up clearly lacks research…
PS: As we speak, Hero has sought a tie up with AVL engineering for more technology. Clearly, they are keen to make a mark on the international motoring community.

Posted: 13/03/2012 at 06:25

The latest news is that Germany's VW (through Audi) is interested to buy Ducati. As far as Ducati's is concerned this is a more interesting solution. With VW, a 2-way technology transfer would be possible, while with Hero as owner, technology transfer would be basically 1-way. Obviously, Hero would benefit a lot by owning a prestigious company like Ducati, not only technologically but also image-wise.

India is the world's second largest market, but while there is a huge production capacity in India, the technology level of the Indian manufacturers is at this moment still quite low and is based on (older, even ancient) Japanese (Hero, TVS etc.) or english technology (Royal Enfield).
Obviously, there is a need for Indian manufacturers to acquire the state of the art technology from outside, by cooperation or if opportunity arises by taking over a (well known) company (KTM, Ducati etc.).

Posted: 13/03/2012 at 12:53

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