Indian heart, developed in Manchester. The future of Hero Cycles bicycles passes through England
The biggest bicycle production house in the world, the Indian Hero Cycles, has opened a research and design center in Manchester, in order to give birth to the next bike generation. This seems to be no coincidence, as Hero Cycles is based in the North of India, in the city of Ludhiana, which has been called for years “The Indian Manchester”. All in all, now or then, it was in the cards for this huge bicycle industry to land in Great Britain, where, in the meantime, bikes have become a widespread mania, a fetish, a status symbol: “In India cars are what determines your status – said Mr. Munjal, Hero Cycles president and CEO – while in Denmark and in London it is more prestigious to own a good bicycle than drive an Audi 7 series”.
Hero Cycles produces 5.5 millions of bicycles per year: it means that out of twenty bicycles assembled all over the world, one is made by them. Being aware of this strong impact on the market, and knowing that they can get the attention of the European bike world, the giant has been planning to open up a factory directly in Europe, and there are high chances for Manchester to be the chosen city. For now, the center in charge of Research and Development is located close to the Manchester velodrome, where the departments of British Cycling, the most important institution dealing with cycling in Great Britain, are operating. Therefore, it is not excluded that the choice of that place hides the hope that the company's upscale bikes can meet the needs of the Olympic Britain team.
European metropolises' streets, the ones of Amsterdam, Copenhagen, as well as Berlin, are invaded by a very thick swarm of bicycles, and a considerable part of those shows sophisticated mechanical solutions and technology. The windows of the bike stores, incredibly spacious and able to lead fashion and new esthetics, showcase models which can easily adapt to the urban cyclists' demands.The key words are lightness, solidity and flexibility. At this historic time, Hero Cycles, which is focusing on innovation and design, doesn't want to lose ground and it is strategically reorganizing the company to expand its global market over the next years. In Europe, Great Britain is the second biggest bicycle market, it accounts for 3.5 millions of items sold in 2015 and, with these figures, it positions itself only behind Germany.
The choice of Manchester, explains Pankaj Munjal, was made as a consequence of the city tradition: it is the beating heart of technology and computer innovation, e.g. the graphen molecule research was carried out there (the insights about graphene were worth the Nobel Prize for Physics in 2010 for two physicians of the Manchester University).
The World Bank recognized Munjal's company, founded in 1945, as corporate policy behavioral model. In order to get access to the bike market in India, the biggest motorcycle manufacturer on a global scale, i.e. Honda, during the ‘80s decided to merge with Hero Cycles, acknowledging the company importance in the whole value chain – production, distribution, management – and the extraordinary organizational skills of the family, who after forty years could brag about not having a single day of strike in the company. “What made Honda approach Hero was the philosophy and the group value”, said the CEO of the new-born society Hero Honda.
Today Hero Cycles produces full suspension mountain bikes, traditional city bikes, majestic electric bikes, bikes for kids, girl's bikes with baskets, timeless BMXs. Bikes for every path and every need.
Bicycle prices are increasing, together with technological and material innovation, making the sector create a sort of luxury niche: In 2015 the bike average price in Netherlands was 914 euros, in the United Kingdom was 300 euros, according to the data released by the European Cyclists' Federation. Also Hero will inevitably aim at a high market segment, through more and more sophisticated and upscale products, and, also because of this, factory opening in the old country appears to be increasingly important: “You just cannot manufacture a Porsche in a Skoda factory”. Said Mr. Munjal.
The bicycle globalized market, where the developing countries are imposing on specific sectors and old manufacturers are struggling against competitive prices, has to face fiscal fights and commercial barriers. “The anti-dumping duties come too late”, said the chief of Avocet, a company partially outsourced by Hero Cycles, referring to the fact that the taxes imposed by the EU on Chinese bicycles, for instance, have been set at 43%. By adding to that the increasing transportation cost – Hero exports in Europe, Africa and America – it is clear that also from this standpoint the need of starting the production in the United Kingdom is getting urgent.
In 2015, Hero Cycles found also a new face embodying the company, the one of a Bollywood actor. The Indian movie star Arjun Kapoor has become the brand ambassador: “We are excited because a young icon such as Arjun Kapoor is now linked with us and will represent our brand and its ethics in the media world”, said Hero Cycles' co-president. The company image turning point coincided also with the decision of launching itself into the online market, so as to make the bikes' purchase easier and more convenient for clients all over the world, who, with a click, can access its products.
Since Hero Cycles was founded – by the four Munjal brothers who used to live in a small town which is now part of Pakistan – it understood where the market would go, managing to make a streak of right decisions, never faltering and undermining the original philosophy: looking at the past to improve the future, a future seen as a chance to seize or even to pre-empt. The fact that Hero Cycles bravely shows no worries about the Brexit may be read as a positive sign, and the negative economy forecasts about Great Britain's decision to leave the European Union may have been too dull. Perhaps, Europe is going away from Great Britain, yet India is approaching.
