Indian giant Hero Cycles creates UK launchpad for global sales drive – special report from IndiaGBnews

Indian giant Hero Cycles creates UK launchpad for global sales drive – special report from IndiaGBnews

India’s largest bicycle manufacturer Hero Cycles is continuing its surge in UK and European markets following the acquisition of British brand Avocet Sports and the launch of a £2million global design HQ in Manchester.

A special report from IndiaGBnews.com with Hero Cycles owner Pankaj Munjal, in Canary Wharf, London, unearths the firm’s plans for the future amidst a backdrop of ‘Viking Street Velodrome’ – a new UK-wide urban cycling initiative which the Indian firm is sponsoring throughout 2017.

pankaj-munjal-hc-ghaziabadHero Cycles is India’s oldest and largest manufacturer of bicycles, which for a country of 1.4billion people heavily dependent on two-wheel travel across sprawling megacities, means a lot of business.

The Punjab firm is responsible for manufacturing circa 6million bikes a year. Around 5pc of the world’s total output. Of the 500,000 units produced a month around 20pc are currently exported overseas. However, Hero Cycles believes the UK bike market holds massive potential with around 3million bike sales alone each year – equivalent to £1.4billion. It remains a territory of continual growth for the Indian outfit supplying around 18,000 to 20,000 bikes per month.

Now with the recent acquisition of British brand Avocet Sports it has a new gleaming jewel in its crown in Viking – a long established UK bike brand set to celebrate its 110th anniversary in 2018. This along with other Avocet brands, including children’s line De Novo, will form a key ingredient for spearheading a pan-European sales drive.

Further investment in a new £2million global design HQ within a stone’s throw of Britain’s spiritual cycling home – the National Cycling Centre in Manchester – is another indication of Hero’s serious intent to take the UK by storm. Its new base set up in January 2017 is a hive for some the finest creative minds in bike design from across the world including innovators from India, Taiwan and Denmark.

topimg_32747_pankaj_munjalHero Cycles owner, chairman and managing director Pankaj Munjal said the UK has become a large focal point for firm’s global ambitions. “We have already learnt so much from working in the UK,” he said. “Around 80pc to 90pc of our sales are directly within India, so we have historically been focussed on the domestic market. Through the acquisition of Avocet Sports we have been able to transform our design and engineering capabilities including our standards and expectations. Through this process Hero Cycles has been able to evolve to the next level. I thought these developments would have happened in two to three years’ time, but it has happened much sooner.pankaj_jpg_1549349f

“Hero back home is a $1.2billion asset based company, we have 10,000 people working for us, we are also into automobile components like chassis for cars, safety components and transmission for motorcycles. With all that technical capability, we are in a position to take on the world leaders. We have hired some very strong resources and have a top-class board of directors. However, there is something about English design, it is regarded as the fashion capital of the world. There is something unique in the people here and that is what has started to trickle down and we are already witnessing results back in India. Avocet is opening doors for us outside of our traditional markets.”

Mr Munjal’s father and uncle founded Hero Cycles in 1956 and the family firm now sees further involvement from his two sons. The recently acquired Avocet Sports line adds an impressive range of products to Hero’s portfolio including hybrid bikes, children’s bikes, electric-bikes, mountain bikes, BMX and roadster models. Aside from Viking its leading brands include Coyote, Rooster, Ryedale, Lectro, Concept and Riddick.

“First, we had a country specific brand plan, now our plan is to take the English brands overseas to mainland Europe,” said Mr Munjal. “The Land Rovers, the Jaguars – they really inspire us. Technology, promotion, finance, distribution, people, processes – whatever it takes we will be investing into that.

“In terms of progression in the industry, battery powered bikes or e-bikes are the future. They are doing very well on mainland Europe and now within England the change is happening very fast. There is potential across the world, in large economies such as India and China. We are now taking the well-known British brands within the Avocet Sports portfolio and applying more technology to them. We are looking to add an engine on them to take them further.

“In the 1970s we had mopeds, then BMX bikes followed by other trends and now the big wave is e-bikes. The big benefit is their flexibility, you can go far, you can drop your car and cycle to work. It can alleviate challenges of travelling in extreme heat or cold, allowing riders to get to their destinations quicker with less effort. Like a cell phone it’s a big change. In India alone we are planning to manufacture 1million e-bikes. However, in India it is the car owners who are buying them. It’s not that it’s a cycle upgrade or motorcycle downgrade, it’s the car owners that are looking to invest.

“E-bikes will also critically help to reduce urban carbon footprint,” said Mr Munjal. “People can easily commute a distance of 15miles in each direction with an e-bike. If the battery discharges there is always an alternative of pedalling to a destination. A recent announcement by the UK government that all diesel and petrol engines will be banned by 2040 means solutions will have to be found to fill that gap. Cycling is evolving and is clearly one of those solutions. There has been considerable change within the cycle industry in the last 50 years and there is one factor which stands out – Hero Cycles has been through it all. Many of the other competitors have not had to move with the evolution of the bicycle and don’t understand how to do it. E-bikes are just another development which we will master.”

Hero Cycles CEO Sreeram Venkateswaran, said the firm’s new global design hub in Manchester is a centre point for producing new ‘world class’ products for sale across the globe. Mr Sreeram, who helped establish brands in the past in India, said the Manchester UK investment is a strong commitment designed to support the Avocet Sports brands.

“Although the Hero global design set up is based here in the UK it is very much an international team with India, Taiwanese and Danish designers,” he said. “There is no element of the European market which is being missed when we are putting pencil to paper. The UK and Europe are eight to 10 years ahead of India in terms of development of bicycles, so we get a huge lead on our domestic competitors.IMG_1449

“A big message we want to communicate to the market is that our Avocet range of bikes are reliable and great value for money with high-end specifications. They are suitable for cyclists of all abilities from professionals to casual commuters. They are built extremely well and super smooth to ride. As a brand, the Viking name has been holding the hand of cyclists for more than 100 years. Next year Viking will celebrate its 110th year. These are not flash in the pan products, both Hero and Viking have been here for generations. They have been setting the standards for decades, coming up with the specifications which others have copied. We believe both brands will be here for the next 100 years to come. In our experience, we see that as industries evolve they sometimes lose their integrity but Hero Cycles have always maintained the same mission – putting the cyclist first.”

Hero Cycles has a total manufacturing capacity of 7.5million bicycles per year, with manufacturing units in Ludhiana (Punjab), Bihta (Bihar) & Ghaziabad (UP). The firm boasts of an extensive global supply chain with around 250 suppliers and over 3500 dealers stocking its products. In the first four months of the year Hero expanded its dealer reach dramatically creating 200 more ‘touch points’ for its products in the UK. Its mission is to partner with around 60pc of the UK’s 1800 strong dealer network to expand product reach and stock on shop floors.IMG_20170808_105349_370

“We are now talking about promoting brands, we are no longer box shifters,” said Mr Sreeram. “That is what the dealers want, something that can create a pull getting consumers into the showroom. If we are able to do that they will keep the brands on the floor because they will sell off. That’s an exciting journey. We are working with professional cyclists, the likes of Shanaze Reade, a multiple world BMX champion and Olympian. Not only do we want Shanaze as a face for the campaign but from a design standpoint we need professional riders to guide us on bike geometry so we are able to produce bikes with the right specifications which are the most comfortable to ride.

“The capability we can bring as a big company manufacturing 6million cycles a year is a strong selling point for the UK market. We bring a lot to the table including scale, financial muscle and we bring the ability of building brands making them more popular with a range of different people. Hero Cycles exports to more than 50 countries within the major continents including Africa, Asia and the Middle East. However, we see Europe as an extremely important market. India will also naturally be a large market due to its population. It is witnessing growing demand for premium bikes with 25pc to 30pc growth, year on year, for the last four years. We are within that league, producing those sort of bikes. So we are forecasting strong growth within our domestic market following the launch of Viking in September just before the peak bike season hits.”

Mr Sreeram said one of Hero Cycle’s key strengths is that it owns and controls every element of its supply chain. “From our customers perspective, they can rest assured that from the first screw that lands in the manufacturing facility to the final receipt we hand over when they buy the bike, every element of the supply chain is controlled. We do this in a way that integrity and quality is not compromised. Everything is controlled and delivered with the consumer in mind.untitled

“Our growth has always come from organic operational excellence and perfecting the relationship between the business and the customer. When we look to other regions there may be different approaches we can adopt. Looking at the strategy moving forward we may consider more merger and acquisitions. To get the best return we need a certain presence in the market. In the last four months’ we have made very good access into Ireland and Scotland. Our market share in Ireland, in particular, is growing every day. We have reached about 150 regional outlets in Ireland. We have an extremely robust set up there with very good reach. We are now starting to open up other territories outside the UK and that is something exciting.”

The arrival of Hero Cycles senior management team in London was arranged to coincide with the grand finale of The Viking Street Velodrome, a relatively new concept which the firm is supporting as headline sponsor throughout 2017. The urban street sport is growing in popularity and has landed TV deals to broadcast from November on BT Sport, Fox and CNN in the UK and globally. Film crews have been tailing the travelling street show since January documenting progress with the Viking Street Velodrome ‘Pro Series’ now in its fourth year. The concept involves teams of riders taking to ‘Street Velodrome’ in cities across the UK and competing in ‘time trials’ over three laps.

A pantheon of current and former British cycling greats have joined ranks including Olympic track cyclist and gold medal winner Craig Maclean MBE, European and twice Italian national downhill champion Veronika Widmann, British national downhill champion Harry Molloy and British downhill champ Jess Stone.

untitled1The ‘Street Velodrome’ structure usually remains in place for a period of four days also crucially providing an opportunity for members of the public and school children to give the sport a go. The concept which Hero is aiming to take to India sees all participants riding on the Avocet range of bikes including Viking and De Novo models. During the 2017 roadshow it has involved local councils from within regions to send school children along to participate. It has seen children from as young as four-years-old engaging in the action.

 

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