Hero MotoCorp made a splash on Friday in a glittering function at Buenos Aires, Argentina; not only did India’s largest two-wheeler manufacturer enter their 35th global market, Hero also took the wraps off their updated best-seller Glamour. A first global launch of a now global product, but a first for a large Indian manufacturer. They also unveiled former Argentinian football star and current coach of Spanish la liga club Atletico de Madrid, Diego Simeone as their brand ambassador.
Hero’s entry into Argentina continues their plans of global outreach; in the three years since they started selling their products in international markets, this south American nation is their 35th global market. The Argentinian market for two-wheelers is currently estimated at around 500,000 units annually, but as Hero enters new markets they are enduring different sorts of challenges. Pawan Munjal, the Managing Director of Hero MotoCorp joked that the launch was taking place ‘a little far away from home’; but he specified that this carried on the company’s aim of launching their brand and products in 50 global markets by 2020, with the aim to achieve ten percent of their overall volume from global sales in the same timeframe.
Munjal also spoke of the challenges the company faces as they expand. In the Colombian market for example, the costs of localisation and local product is more expensive than India. But because local laws demand local assembly, Hero is having to establish small plants across the world. In Argentina, their partners Marwen S.A have established a small 5000-unit capacity assembly unit in the Villa Rosa region outside Buenos Aires. However, Munjal is hoping that these small plants across the world will help Hero serve even more countries going forward, “using Argentina as platform we can launch our products in Paraguay and Uruguay for example.”
The Argentinian market for two-wheelers is a highly fragmented one, and with the country suffering from high inflation (close to 40 per cent in 2016) it is dominated by cheap Chinese imports which are locally assembled. Several local companies have shares of between 15-16 per cent of the market, with a local company ‘Motomel’ being the market leader and Hero’s Indian rival Bajaj is also present in the market through a partnership with a local Argentinian distributor.
Munjal and his executive team, however, were confident that Hero could achieve a ‘Top Two’ position in the market within five years, “while our products may not be the cheapest in the market, we believe the values that have differentiated us in India will help us in Argentina as well - the quality and durability of our products and our extensive service network”, he said, adding that he expected future emissions norms for two-wheelers in Argentina coupled with Hero products fuel economy, both currently non-factors in the market to also help the Indian company in the market, “we can help in shaping this market”.
Hero is planning major market penetration with 40 showrooms scheduled to open soon and 95 dealerships by the end of December 2017. To prove their determination in this market, Hero launched four products for the market at the start - the new Glamour (to be called Ignitor in South and Central American markets), the Dash scooter, the Hunk and Hunk Sports. The company also believes the learnings from the Argentinian market would help them as they go head to launch in the two largest two-wheeler markets in the region - Brazil and Mexico. The signing of Diego Simeone, a highly respected coach and an association with la liga club Ateltico De Madrid will also expand their reach in these markets, with the Spanish Primera liga a highly popular league in this part of the world and Simeone considered an Argentinian sporting legend.
As for Hero themselves, motorsports continues to be on the radar. The launch of the Glamour and introduction into Argentina was timed to coincide with the finish of the legendary Dakar rally in the Argentinian capital on Saturday. Hero Motosport Team Rally is participating in the rally with two riders, Indian rider C.S Santosh and Portuguese rider Joaquim Rodrigues (J-Rod) carrying on in the race, the latter even cracking the top ten in the two-wheeler section as the standings stand currently. “Just finishing in our debut recae is a matter of pride and I hope to personally welcome our riders in on Saturday evening”, Munjal said. Hero is not the only Indian team taking part in the rally with TVS also participating.