“When others pull out, I believe it’s time to jump in,” says Naveen Munjal, founder and managing director of Hero Electric, India’s largest electric vehicle (EV) manufacturer. Over a Zoom call with The Ken, Munjal is talking about the peculiarities of running a brick-and-mortar automotive company during a lockdown.

Covid-19 has brutally hit India’s $118-billion automotive industry. Already smarting from lacklustre sales lacklustre sales Autocar India Two-wheeler sales down 27 percent in June 2020 Read more  in 2019 and the painful switch to new BS-VI emission norms, the sales of petrol scooters fell by 27% in the first quarter of 2020.

Green shoots, though, have appeared in places not many would have expected—India’s fledgeling EV industry. Leading the pack are homegrown brands like Hero Electric and Okinawa. According to a report by JMK Research and Analytics, a Delhi-based research and advisory firm, Hero Electric’s sales hit a 1000 units in March 2020, though the company claims its closer to 7000, taking low-speed scooter sales into account. Hero Electric has a sizeable 36% share in India’s high-speed electric scooter high-speed electric scooter High-speed electric scooter Electric scooters that travel at over 25 km/hour and have to be registered under the Motor Vehicle Act market, the report says. 

Fundamentals

Hero Electric had posted a net profit of Rs 5.19 crore ($695,000) in the year ended March 2019, up from incurring a net loss of Rs 4.48 crore ($600,440) in the previous year, according to company research platform Tofler. During the same period, the company’s revenue increased from Rs 113 crore ($15 million) to Rs 187 crore ($25 million)

Munjal, who carved Hero Electric out of the $8-billion automotive giant Hero MotoCorp (formerly Hero Honda) over a decade ago, has a penchant for doing counterintuitive things. In 2001, he introduced India to electric bicycles. Between 2010 and 2013, as the rest of the EV industry was collapsing under the dual pressures of the global financial crisis and shifts in government subsidy policies, he chose to carry on supplying spare parts to the competition. Reaching for what he calls “explosive growth” during a global pandemic, Munjal is hedging his bets on the unpredictable EV industry for the third time.

Hero Electric’s first move to counter the pandemic was to reach out to over 5,000 customers and educate them about the advantages of going electric. It did this through a series of webinars and online town halls. “People have started seeing the benefits of living in clean air,” says Munjal.

AUTHOR

Olina Banerji

Based in Delhi, Olina writes about mega-trends in urban mobility, education, skilling and the environment, with a focus on how institutions and innovations can help cities grow sustainably. She is a graduate of the London School of Economics, and has worked previously with India Today and global non-profit Ashoka.

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