Problems seem to be brewing between Pawan and Naveen Munjal of the Hero family when it comes to the electric vehicle business, which has so far been with Naveen who runs Hero Electric. However, the Hero MotoCorp led by Pawan Munjal recently announced its foray into this space.
(LR) Naveen Munjal, MD – Hero Electric, and Pawan Munjal, MD & CEO – Hero MotoCorp
A recent report suggests that Pawan and Naveen Munjal of the Hero family appear to be at loggerheads. This is in reference to the Hero MotoCorp brand, led by Managing Director Pawan Munjal, entering the electric vehicle segment. In contrast, the Hero Electric brand led by Naveen Munjal has grown into one of the biggest players in the electric vehicle segment and currently sells the largest number of electric two-wheelers. With Hero MotoCorp announcing its entry into this space, the move drew a reaction from Naveen Munjal.
Read also: Hero MotoCorp to enter EV segment in 2022: report
According to a report from Moneycontrol, Naveen Munjal, MD – Hero Electric said, “We are not at all worried about this as there is a very clear agreement within the family that happened when we proceeded with the restructuring in 2010 on how brands are There was no non-compete (clause) regarding product segments, meaning anyone could enter any segment, but there is a very strict non-competition clause for the use of the mark.
According to the agreement, Hero MotoCorp cannot enter the electric vehicle segment under the “Hero” brand. This right remains only for Hero Electric. However, the world’s largest two-wheeler company in terms of volumes; announced plans to make a foray into the EV space earlier this year. Hero has partnered with Taiwan-based Gogoro to bring its electric vehicle technology to India and the first product will launch in 2022.
Hero has not one but two electric two-wheelers slated for launch in 2022. In the event of a dispute over the name of the brand, Hero Electric could take legal action to block Hero MotoCorp’s entry into the market.
Speaking of the same thing, the report quotes Naveen Munjal as saying: “Environmental products, green vehicles and electric vehicles; these stay with us. If anyone does, we will have to take our own necessary measures, whatever is available to us by law. We are very clear not only on the spirit of the agreement, but even on the wording of the agreement. There is no ambiguity there. “
“There is a family arrangement, which everyone in the Munjal family is well aware of, and everything will be done within these parameters of both understanding and agreement. It remains a model family arrangement. Hero MotoCorp is well aware of its rights and as always we will continue to act on the basis of the best legal advice. We never comment on speculations regarding our business strategy or the products we may launch in the future, “said a spokesperson. word of Hero MotoCorp in the report.
Read also: Hero Electric raises ₹ 220 crore in growth capital, aims to sell 1 million units annually
Hero Electric currently has a market share of around 42 percent with 13 products for sale. The company recently raised approximately 220 crore of growth capital which will be used for product development, product line expansion and the opening of new factories. The company aims to sell around one million vehicles per year.
In addition to co-developing models with Gogoro, Hero MotoCorp has also developed models independently at its R&D centers in Rajasthan, India and Stephanskirchen, Germany. The company’s product line will include both fixed battery electric scooters and interchangeable battery versions. Meanwhile, the manufacturer has also invested in Ather Energy, although it does not share the technology or components with the same.
The electric two-wheeler segment is growing. From established players to start-ups, the options will soon be plentiful from Ola, Okinawa, Ather, Ampere, and more. It has to be seen how Hero MotoCorp and Hero Electric will navigate this space in the future.
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