With the government of India considering a blanket ban on all two wheelers with displacement of under 150 cc in the medium term, all established OEMs are frantically working on electric two wheelers. Given that the lion’s share of its business comes from small displacement commuters, Hero Motocorp, India’s leading two wheeler brand by far, would be the most affected if the ban does becomes reality.
Livemint reports that Hero Motorcorp may not be able to use its own brand name on its future electric models because of a Family Settlement Agreement within the Munjal family which was signed in 2010.
It is being reported that rights to use Hero branding for electric vehicle business is reserved by Naveen Munjal who currently promotes Hero Electric Vehicles. So, the family’s flagship business entity Hero Motocorp, promoted by Naveen’s cousin Pawan Munjal, is likely to come up with a fresh brand to market its electric products.
According to the publication’s sources, Hero Group’s family members are not permitted to use the Hero branding to compete with one of family’s existing business verticals.
Hero Motocorp is currently developing a pair of pure electric scooters but plans of commercial launches are still under wraps and this branding related issue could be the reason for the delay. It is possible that Hero Motocorp and Hero Electric could find a way to resolve the issue and co-exist.
Hero Motocorp could view this situation as an opportunity to create a whole new brand for its electric mobility business. Spinning off a new brand identity for electric vehicle vertical is an interesting strategy which other OEMs are also expected to adopt (Bajaj with its upcoming Urbanite brand for instance). Such a move will allow Hero Motocorp to redefine its core values and appeal, and target entirely new audience base which doesn’t relate itself to the parent brand.
Interestingly, Hero Motorcorp holds a sizable stake in Bangalore-based electric two wheeler startup Ather Energy which has started off strongly in Bangalore and Chennai markets. Will the two wheeler giant acquire a controlling stake in Ather and make it its EV sub-brand? I guess we would be knowing sooner than later.