Hero Family At Loggerheads Over Electric Vehicle Business: Report

A recent report suggests that Pawan and Naveen Munjal of the Hero family seem 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 Naveen Munjal led Hero Electric brand has become one of the biggest players in the EV segment and currently retails the highest number of electric two-wheelers. With Hero MotoCorp announcing its entry in this space, the decision has evoked a reaction from Naveen Munjal.

Also Read: Hero MotoCorp To Enter Electric Vehicle Segment In 2022: Report

Hero Electric currently holds a 42 per cent market share in the electric two-wheeler segment with 13 products on sale

According to a report by Moneycontrol, Naveen Munjal, MD - Hero Electric said, "We are not worried on that account at all because there is a very clear agreement within the family which happened when we did the restructuring in 2010 on how the brands are going to be used. There was no non-compete (clause) as far as product segments are concerned, which means anybody could get into any segment but there exists a very strong non-compete clause for brand usage."

As per the agreement, Hero MotoCorp cannot enter the electric vehicle segment under the 'Hero' brand name. That right remains only with Hero Electric. However, the world's largest two-wheeler company by volumes; announced its plans to 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 be launched in 2022.

Hero has not one but two electric two-wheelers planned for launch in 2022. Should there be a brand name dispute, Hero Electric could take legal recourse to block Hero MotoCorp's arrival in the market.

Gogoro is known for its battery swapping technology, which Hero plans to introduce in India

Speaking about the same, the report quotes Naveen Munjal saying, "Environmental products, green vehicles and electric vehicles; those remain with us. Should anybody venture into it, we will have to take our own necessary steps, whatever that is available to us by law. We are very clear on not just the spirit of the agreement but even the wording of the agreement. There is no ambiguity on it."

"There is a family understanding, which everyone in the Munjal family is well aware of, and everything will be done within those parameters of both understanding and agreement. This remains a role model of a family agreement. Hero MotoCorp is well aware of its rights and as always, will continue to act based on the best legal advice. We never comment on speculation either of our business strategy or products that we may launch in the future," a Hero MotoCorp spokesperson was quoted in the report.

Also Read: Hero Electric Raises Rs. 220 Crore Growth Capital, Aims To Sell 1 Million Units Every Year

Hero Electric presently has a market share of about 42 per cent with 13 products on sale. The company recently raised about Rs. 220 crore in growth capital that will be used for product development, expanding product lines and opening new plants. The company aims to sell about one million vehicles in a year.

Hero MotoCorp has partnered with Gogoro for developing electric scooters and is also independently developing its own EVs

Apart from co-developing models with Gogoro, Hero MotoCorp has also been developing models independently at its R&D centres in Rajasthan in India and at Stephanskirchen in Germany. The company The product range will include both fixed-battery electric scooters and swappable battery versions. Meanwhile, the manufacturer has also invested in Ather Energy, albeit does not share technology or components with the same.

The electric two-wheeler segment is hotting up. From established players to start-ups, options will soon be ample right from Ola, Okinawa, Ather, Ampere, and more. It needs to be seen how Hero MotoCorp and Hero Electric will navigate through this space going forward.

Source: Moneycontrol