Cars and bikes are in Pankaj Munjal's blood -- after all, his family founded the Hero Group, the New Delhi-based US$5 billion enterprise comprising 20 companies including the world's largest manufacturer of bicycles. As managing director of Hero Motors and Hero Cycles, Munjal oversees the company's two-wheeler production as well as its global auto components business. In an interview with India Knowledge@Wharton at the 2010 Wharton India Economic Forum, the auto aficionado spoke about why his firm is focused on the small-car market, what he looks for in new hires, and what toys he likes to take for a drive.
An edited transcript of the conversation follows.
India Knowledge@Wharton: Tell us about the structure of your business.
Pankaj Munjal: The Hero Group is the eighth largest manufacturing group in India. We have sales of US$5 billion and employed 27,000 people last year. Our group has two ends: a front end -- bicycles and motorcycles [that directly] touch customers -- and a back end [which consists of] parts and services. Our group's companies are the leaders in bicycles; we claim to be the world's largest maker. [We are also a big player in] motorcycles, and our parts [business had] about US$1.2 billion in sales last year.
Hero Cycles and Hero Honda [are customer-facing businesses]. [For our] parts [manufacturing] companies, we have a joint venture with Showa of Japan. We are market leaders in the country and supply to Suzuki and Honda. Suzuki is a market leader, with a 50% market share in India. And we've got a joint venture with Sumitomo Corp. called Munjal Kiriu. We supply to Suzuki, Toyota, Nissan, General Motors -- practically everybody. Every Hero Group company is number one in [its] field.
Then we have a foundry and aluminum die-casting plant, which supplies [these parts businesses]. These components go into automobiles, so they are [quite] competitive. [Our customers] are global companies. When Suzuki [puts out] a tender, it will be a tender for worldwide sales. So if they buy from us, it means we are really globally competitive. So this is the broad structure of the group.
India Knowledge@Wharton: The business that you are in, especially auto parts, depends on the health of the auto industry. Have you seen any challenges with the global downturn? What has been your strategy to weather those?
Munjal: India never really had a downturn. In October 2008, when the meltdown started, there was a little lull for about two months. It was not like a depression, but a little flat curve; growth was not so aggressive. Come January 2009, things were up and buoyant again.
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