Hero MotoCorp Ltd to drop the Hero brand name and need to tag a new name when it plans to launch new electric two-wheelers. Hero MotoCorp Ltd is currently prohibited from using the Hero brand to sell any electric two-wheelers under a Family Settlement Agreement of the New Delhi-based Munjal family finalized in 2010.
As per the agreement in Munjal family, Pawan Munjal’s cousin Naveen Munjal – promoter and managing director of Hero Electric Vehicles Pvt. Ltd has taken all rights to use the Hero brand for selling electric vehicles in the domestic market. therefore any other member of the Munjal family cannot use the Hero brand.
Due to the implementation of strict localization norms by the Union government for producers of eco-friendly vehicles to avail subsidies. Due to this Hero Electric has been facing tough times in recent months as sales decreased. If they don’t do localization of the scooter; the company will not be eligible for the second phase of the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme.
The government is going to ban on all two-wheelers with a displacement of under 150cc by 2025 and three-wheelers by 2023 and to adopt electric vehicles. Hero MotoCorp along with Honda Motorcycle and Scooter India Pvt. Ltd is the biggest maker of two-wheelers below 150cc will be hit the most if such a blanket ban or a partial shift to electric wheelers come into effect.
Hero MotoCorp, the flagship business of the Munjal family, has been developing two electric scooters, but the company is yet to announce plans for their commercial launch. Maybe this branding related issue could be the reason for the delay. It is possible that and Hero Electric could find a way to resolve the issue and co-exist.
Interestingly, Hero Motorcorp holds a stake in Ather Energy – Bangalore-based electric two-wheeler startup. Where Hero Motocorp might take up full power anytime soon.