<br>”We have been seeing robust retail demand and the numbers are improving week-on-week”, he added, as Hero MotoCorp sold 1.6 lakh two wheelers in India in the month of May. There is a strong buzz that there will be a massive ramp up in sales in June, although Munjal did not comment on it.
“The Business Continuity Plan that we prepared has allowed us to hit the ground sprinting as businesses opened in India and across the world,” Munjal added.
Munjal said that all the manufacturing plants have resumed operations now, and about 90 per cent of customer touch points have also reopened.
Munjal emphasised that in such uncertain times, it is of utmost importance to communicate effectively, clearly and frequently with everyone — all the stakeholder groups. As part of this communication exercise, Munjal has held 30 digital Town Halls with various stakeholder groups, including employees, dealers, supply chain partners and global distributors.
On the emerging trends in consumer preferences, Hero MotoCorp Chairman and CEO said that affordable personal mobility is likely to see an increase in customer preference, as people may be reluctant to use public or shared transportation.
“In the short term, there will be certain sectors such as two wheelers, affordable cars, FMCG and healthcare, that will see an uptick in business. In the long term, sustainable mobility and travel would become even more critical,” he added.
Munjal expects the rural markets to outperform. “Almost half of our sales come from the rural market. Given the upswing in agricultural activities, the infusion of fiscal stimulus and the forecast of a normal monsoon, the rural economy is poised to do better than urban,” he said.
Q: Hero MotoCorp has taken everyone by surprise with the despatch and retail volumes in the month of May. How have you been able to manage this?
A: At Hero MotoCorp, we were probably among the very first companies to anticipate the oncoming crisis due to COVID-19, and constituted a Business Continuity Task Force — comprising of Leadership Team members, under my direct supervision — as early as in February.
With the health and wellbeing of our employees as the topmost priority, we were the first organization in India to proactively suspend operations at all our manufacturing facilities globally on March 22. We were also among the first companies to resume operations on May 4.
The Business Continuity Plan that we prepared together has allowed us to hit the ground sprinting as businesses opened in India and across the world. It is because of this level of preparedness that we have been able to retail over 160,000 units of motorcycles and scooters in India in May, after our dealers reopened their showrooms during the month with the partial lifting of the lockdown in the country.
We have commenced operations in a graded manner at all of our manufacturing plants in India and the facilities in Colombia and Bangladesh.
At the same time, we have taken every possible measure to ensure the health and safety of everyone in our ecosystem. Business restart manuals have been issued to employees, dealers, and supply chain partners to ensure safe and smooth operations post reopening.
<br>Q: According to our sources, you are also looking at keeping up the momentum with a massive four-lakh unit sales in the month of June. Would you be able to confirm this?
A: As you know, we don't give forward guidance on volumes, nor would I like to comment on specific numbers being speculated in the market.
There is a clear uptick in the customer sentiment, with good conversion of enquiries for all products. We have been seeing robust retail demand and the numbers are improving week-on-week. So we are definitely seeing a positive trend. The customer demand has been positive across the country, except for the markets badly affected by COVID, such as Maharashtra and Gujarat.
We are currently focused on scaling up of operations — both at the level of manufacturing plants as well as at customer touch points — with all the safety protocols in place. All our manufacturing plants have resumed operations now, and about 90 per cent of our customer touch points have also reopened.
Almost half of our sales come from the rural market. Given the upswing in agricultural activities, the infusion of fiscal stimulus and the forecast of a normal monsoon, the rural economy is poised to do better than urban. We will have to wait and see how it pans out.
Q: During this lockdown period, you have constantly been in touch with your employees, dealers, suppliers and other stakeholders. How do you keep your ecosystem motivated and positive?
A: You are absolutely right. In such uncertain times, it is of utmost importance for any leader to communicate effectively, clearly and frequently with everyone — all the stakeholder groups.
To boost the morale of employees, dealers, supply chain partners, global distributors and other stakeholder groups, I have held more than 30 digital Town Halls so far, including a dozen with employees.
We also invite the families of our employees and global distributors to these Town Halls, celebrate the festive occasions together and share our experiences. These interactive Town Halls have not only helped us stay connected during these uncertain times, but also brought everyone in the Hero ecosystem closer to each other, and stay positive.
Q: How is Hero MotoCorp taking safety measures for the plants and employees?
A: For me personally, as well as for our Leadership Team, ensuring the safety and wellbeing of our employees and their families has been the top most priority during this period of lockdown. As I said a little earlier, Hero MotoCorp was among the first companies to shut down all manufacturing facilities and offices globally and move to work from home, as early as February 22nd.
In order to ensure safety of our people at the plants, in our offices and also for our dealer staff, we have shared with all the stakeholder groups the guideline manual on the safety protocols to be followed at the workplace. Some of these guidelines include wearing face masks, face shield, digital attendance through Hero App, regular sanitization of personal items, workstations and maintaining social distancing, etc.
Q: What is the current capacity the company is working at?
A: Most of our plants have started moving from single to double shift, and we are gradually ramping up production.
Q: There is talk about a “New Normal”. What would that mean for Hero MotoCorp? How do you see consumer preferences shifting in a post-lockdown phase?
A: As businesses reopen, a shift in the customer behaviour is expected and this is where our business continuity preparedness that we did during the lockdown period, has been useful.
Affordable personal mobility is likely to see an increase in customer preference, as people may be reluctant to use public or shared transportation. In the short term, there will be certain sectors such as two wheelers, affordable cars, FMCG and healthcare, that will see an uptick in business. In the long term, sustainable mobility and travel would become even more critical.
There is also an indication of an increasing shift in the customer preference towards the digital and online platforms for making their purchase. As two-wheelers remain a highly personalized and high-involvement purchase, brick and mortar stores will continue to co-exist with digital and online sales in the foreseeable future.
(Sanjeev Sharma can be contacted at email@example.com)