Millionaire Asia

Interview with Abhishek Munjal, Hero Cycles

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Hero Cycles is a quintessential Indian brand that almost everyone in the country identifies with. And the brand continues its innovation trajectory with its new generation scion Abhishek Munjal.

Representing the third generation of the illustrious Munjal family, Abhishek Munjal is disarmingly humble. The scion of O P Munjal and second son of Hero Motors Chairman, Pankaj M Munjal, Abhishek is Director, HMC, A Hero Motor Company and is deeply involved in the company’s operations, vision and strategy. Being the youngest director ever at Hero Cycles, he believes that cycling is yet to find its potential in this country and the world. To keep things real he is often seen at rural distributorships in order to keep abreast of opportunities to realize his vision of enabling the poorest of the poor to access livelihoods, education, healthcare and other state sponsored services. He tells us more in this exclusive conversation.

Tell us about your early days and how being part of a business family influenced your life?

Growing up under the care of the late Shri O P Munjal was very inspirational. He was not only a successful entrepreneur, but also a poet, a lover of Urdu language and a patron of the arts. The stories of how he and his brothers built a thriving business from scratch have helped strengthen our belief in the power of determination and hard work. I am very close to my elder brother Aditya and from early childhood a habit of getting up early has been inculcated in us by our grandfather. Such discipline has helped me in my long-term focus on career goals. We are still a traditional family in many ways. Instead of cakes, our family celebrates birthdays and anniversaries with havans.

Did you always have the entrepreneurial spirit in you? What kind of pressure do you face being in the family business?

Well, growing up in a business family exposed us to the challenges of entrepreneurship early on in life. It also helped inculcate in us an entrepreneurial spirit. Since I was 15, I spent days observing, studying and drawing up charts for our production facilities in Ludhiana. Being surrounded by successful entrepreneurs including my father, Shri Pankaj M Munjal MD and CEO of HMC, a Hero Motors Company and my brother Aditya Munjal, who heads the segment on premium bikes, helped me set my mind on becoming an entrepreneur. I studied economics at Indiana University in preparation for my future role as a Director at Hero Cycles. My father has always believed that one learns best by studying how rural retail and markets work and so I made sure I did that. I had to prove myself to the company’s shareholders before I was accepted for the post of a Director in the company. Yes, the pressure of being surrounded by super achievers is always there as the world always looks towards you with high expectations. However, the kind of experience you gain by being a close part of such a family propels you forward. As an entrepreneur I want to chart out new territories for our business, and establish new avenues of growth. I would work to leave my own mark.

What is your focus area in terms of developing the cycle business?

At Hero cycles, we believe in constant evolution. The cycle itself has witnessed tremendous evolution in design and technology in the past century. What we are witnessing now is a rapidly growing opportunity in the area of electric mobility in India and the world. With an increasing consciousness about the environment and a greater bent towards fitness, the next few decades are bound to witness a surge in electric bikes. Business models around e-bikes have already been developed and there are certain new areas such as e-MTBs that hold a lot of potential. I am an integral part of production where I keep the numbers coming in the most efficient manner possible. My focus will also be on expanding the scale of operations while ensuring quality across the board. Ensuring supply of better mobility solutions for the poorest of the poor is another area I would like to focus upon.

What are some of the pioneering work you have done to take the business forward?

My job description is a Director of the company looking after the production plant and the backend. I make sure that our processes and operating standards come to par with international best practices. I spend a great deal of my time continuously studying present systems and cost-efficiency parameters, workflows and alternatives and finding ways to make them better. For example, I have introduced several automations in assembly line monitoring using emerging technologies and also brought in several stages of quality checks. I will continue to ensure that we make the best quality of products available to our customer.

Tell us about Hexi, the last-mile transportation startup and how it works?

Hexi is a pioneering service headed by my elder brother Aditya Munjal. It is a first and last-mile transportation designer and its products include e-rickshaw as well as cycle sharing services to improve last mile connectivity in urban centres of India. Notably, lack of last mile connectivity is a key challenge to greater acceptance and usage of public transport in our cities.

How do you plan to tap the market with growing awareness of health and cycling is now back in focus?

We make sure we tap on to any new market trend and respond to it by evolving and expanding our portfolio. The past few years have witnessed a remarkable growth in the fitness and sports bicycle segment in India as more and more people take to cycling for leisure and fitness benefits. Hero Cycles is very much a part of lifestyle movements in cycling. We are working on developing a wide range of bicycle options to suit the needs of every commuter on the Indian road. From specially designed hi-tech bikes for mountain terrain riding to smart city commute with new-age gear shifts to better designed standard bikes for 24 × 7 cycling, our portfolio is constantly evolving and adding new concepts and products. Our Lectro range of bikes in the EPAC category is also adapted to the requirements of the beginner in health and fitness routines. We are co-sponsors of the MTB Himalayan mountain bike races and take part in several voluntary initiatives as avid cyclists ourselves.

Tell us about Ludhiana’s Cycle Valley project?

Ludhiana’s Cycle Valley project to be established across a sprawling 380 acre land area in Dhanansu village is a tremendous opportunity for the cycling industry in India as it promises to attract the world’s best brands and technology in cycle manufacturing, e-bikes and auto components. This will help make India a hub of hi tech cycle manufacturing by upgrading our manufacturing ability and bringing home world class technology and design. Currently, only 1.25 crore bicycles are manufactured in India out of a total 13 crore that are manufactured in the world. Moreover, a bulk of India’s production is focused on low-tech roadster bikes. This project promises to change this scenario. With more than 10 leading global bicycle brands anticipated to bring their capital and technology, it will boost creation of an eco-system that supports modernization and upgradation of the bicycle and components industry. As part of this project, Hero Cycles has been allotted 100 acres of land by the Punjab government to develop a state of the art Industrial Park. As anchor investor of the project, we are planning to invest over Rs. 200 crores in the project with an additional Rs. 200 crores in investment expected from the suppliers. This will enable Hero Cycles to scale up capacity to 10 million bikes a year. The project will also create employment for up to 1000 people.

What are the new products in the pipeline?

There are several new bike models in the pipeline ranging from leisure and adventure bikes to e-bikes. The idea is to reach out to every demographic for a greater personalized ride experience. Much of the products developed in India currently tend to be low end Roadster bikes. We want to bring about a change in this by developing more hi tech bikes at home. We intend to unleash the full potential of more tech-evolved ranges to Indian audiences for a richer more wholesome cycling adventure.

According to you what role do MSMEs play in the sector?

MSMEs signify the measure of competitiveness and competence in an economy. They are very important for employment generation and as reliable sources of spare parts and outsourcing work for Hero Cycles. Again, the proposed Cycle Valley in Ludhiana, promises to create an entire ecosystem of raw material suppliers, part and chassis makers, OEMs and assembly manufacturers. This will optimize costs and production parameters for all stakeholders involved. If the government provides further incentives in terms of tax relief and lowering of import duties on key items such as gear shifts and alloys, there is no reason why India cannot be a thriving global hub for bicycle makers that will serve as a model for other nations.

What are the biggest challenges you see today in your business and how do you plan to overcome them?

Hero Cycles is today a global player with significant presence in Europe already. Our challenge is to constantly evolve and manufacture products that suit the market needs for these regions. At home, the biggest challenge for manufacturers, especially small manufacturers, is the availability of international grade alloys and steel for mass production of quality bikes. It is hoped that the Ludhiana Cycle valley will help solve the problem. High rates of GST and import duties also play a hindrance in sustainable cost models.

What are your future plans for your business?

Hero Cycles is working aggressively to establish a significant foothold in Europe as well as other parts of the world. We are already the world’s largest manufacturer of bicycles in terms of volume. Our objective now is to garner an increasingly greater share in the world’s bicycle market. We also intend to work towards expanding growth of cycling as a culture and lifestyle, especially in those places where cycling has shown the greatest potential for alleviating poverty and fast-tracking development. Places in Africa and India itself have proved that adopting cycle usage for rural settings helps increase business, employment and access of the masses to education and healthcare. We have already been experimenting outside our core business through initiatives like Hexi as well as Public Bicycle Sharing systems. We want these initiatives to grow and propel a positive cultural shift among urban populations.

What does wealth mean to you?

Wealth is a means to an end. In the end all that matters is the work that one is remembered for and the interactions one has had will one’s peers and colleagues. My family has always believed in working hard to maintain wealth. But we are also involved in a lot of philanthropic work as an organization and industrial group. For me, it gives immense happiness in sharing the good times with Hero’s other employees, especially workshop employees, distributors and retailers etc.

What do you like doing outside work?

To help me keep my mind at top gear I start the day with an energizing sport. I play a number of different sports but tennis is my favorite. I am a great fan of Rafael Nadal and the Venus sisters. I do not often get time to jog or go for a walk but I spend time on the treadmill every day to ensure discipline in life. Because my family has been responsible for the evolution of a cycling lifestyle in this country, I love to cycle whenever I can. I also spend a lot of my free time interacting with other cycling enthusiasts and networking with innovators and change makers. I have a number of passions such as the environment and concerns such as air pollution and I follow social media avidly. I also like to read about the great economists and revisit their theories in my spare time.

This story first appeared in Millionaire Asia Jan-Feb 2019 issue here: Cover Story

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