Automobile

The Hero Group (Munjals’) Business Empire

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June 29, 2019

Hero family and group structure research report

The Hero Group History

The journey for the Hero Group began when Brijmohan Lall Munjal started as a bicycle maker along with his three brothers Om Prakash Munjal, Dayanand Munjal and Satyanand Munajal in the 1940s. The group officially came into existence in 1956.

1968-

Tragedy struck the Munjal family with the death of Dayanand Munjal- a fatherly figure for the family.

By the late 1970s,

Hero group had managed to acquire license for mopeds- thus marked the venturing of the company into 2- wheeler business. In order to start manufacturing Hero entered into talks with French two-wheeler company Peugeot for a technological collaboration, but the talks failed. After this, Hero went on further to make its own Mopeds largely based on the Peugeot machines designed in India. In few years, Hero Majestic became a household name in the country, and by 1983 Majestic Auto Ltd, India’s leading manufacturer of Mopeds captured ~35% of the Indian moped market.

By 1971

The Munjals setup their own rim-making division for Hero Cycles & launched another company called as Highway Cycles. After the onset of Highway Cycles, Hero Cycles restructured & streamlined in order to expand rapidly. Within the next 6-7 years, the production at the Hero Cycles plant doubled such that in 1975 Hero Cycles became the largest manufacturer of bicycles in India.

By the early 1980s

Hero Cycles had already crossed the production mark of 1 million bicycles and decided to diversify into various fields- textile spinning, financial services, cold-rolling steel mill (vertical integration).

1983

Hero hit another milestone by collaborating with automobile company Honda of Japan. The JV Company, incorporated as ‘Hero Honda Motors Ltd’ rolled out their first motorcycle ‘CD100’ in the year 1985. Within a span of 5 years, the company touched 100,000^th motorcycle produced by it.

1985

During 1985, Hero also collaborated with another Japanese company ‘Showa’ to make shock absorbers, and the company was known as Munjal Showa.

1986

Hero Cycles registered with Guinness Book of World Records as the largest bicycle manufacturer in the world; with production of ~19,000 bicycles per day. Amidst success in the business front, yet another tragedy struck the Munjals when Raman Kant Munjal, Brijmohan’s elder son who was instrumental in setting up of Hero Honda died suddenly in June 1991. His death brought a huge shock to the family & Brijmohan who had retired from the business got back into the business with his younger son Pawan Munjal. Moving along with loss, the group underwent further diversification & expansion.

1991

Hero Honda Finlease was established in order to finance the motorcycles for customers. It was followed by the incorporation of Hero Exports in 1993 for exporting 2 wheelers from India.

1994

Honda reaffirmed its partnership with Hero for next ten years. Along with this Honda allowed Hero to foray into the domain of Scooters with the technology of Honda. Hero next then tied up with BMW- German automobile giant in order to manufacture the 3 series in India. Unfortunately the partnership and the plan failed to work which led to the breakdown of the partnership. In the beginning of the 21^st Century, the group which started with 4 Munjal brothers had extended to 21 active members of the family handling different operations and the group diversified into IT and IT-enabled services.

2002

Hero Cycles in order to manufacture high-end bicycles for the premium market tied up with National Bicycle Industries and later during the year the group launched Easy Bills. The facility offered utility bill collection & retail services to the people.

2006

Hero group came out with 100 cc Pleasure scooters and that too without Honda. This was because the Munjals could not for ever hang with Honda, moreover, when Honda had to enter India with 4 wheelers it did not come to Munjals rather went to the Shrirams.

2010

The family split 4 ways, the cross-holdings realigned in a way that each family member gets ownership of the business which they managed. Brij Mohan Munjal’s family got 26% stake in Hero Honda Motors while Om Prakash’s sons got to control & mange Hero Cycles. Satyanand Munjal’s son got Majestic Auto, Highway Cycle, Munjal Auto & Munjal Showa; sons of late Dayanand Munjal got Sunbeam Auto & Hero Exports.

2011

Munjals took an unconventional step and decided to walk out of the JV Hero Honda Motors and bought the shares held by Honda. After separating from Honda, Hero group renamed the company as Hero MotoCorp.

2016

Sunil Kant Munjal opted out of Hero MotoCorp to focus on Hero Corporate Services, a company that he owns.

The founding members of the Munjal group- the Munjal Brothers left for the heavenly abode within a year. OP Munjal passed away on August 13, 2015, while Brijmohan Lall Munjal on November 1, 2015 and Satyanand Munjal passed away in April 2016.

The respective business heads of the new generation are looking after the business and at the same time grooming the future generations to shoulder great responsibilities.

Family Structure - Hero Group

The founding members of the group were the 4 brothers -

A. Dayanand Munjal, B. Satyanand Munjal, C. Brijmohan Lall Munjal and D. Om Prakash Munjal.

Their successive family members and what businesses are managed by them is detailed under: