Global approach

Brijmohan Lall Munjal, the tycoon behind the Hero Group is about to strengthen his German connections. This will happen with the acquisition of an automobile design and engineering company in Germany by February next year. This will serve in increasing Hero’s presence internationally through Hero Global Design (HGD). The tycoon is also selling a minority stake in HDG to an Italian company Aprilia, which happens to be Europe’s second largest maker of motorcycles and scooters. Aprilia is presently in a JV with Hero, which will soon launch its two wheelers in the Indian market. While its first scooter, will be an ungeared 75CC four-stroke model, targeting young women, which will roll out at the end of next year. Its 92 CC and 125 CC models will be launched, targeting young men and utility segments soon after that. Taking a cue from companies like Yamaha and Kawasaki who also have similar plans to source two-wheelers from India for other markets, Aprilia too will outsource scooters from Hero Motors to sell in other European markets, as well as in South-East Asia, Latin America and Africa. This is because the European market is far too competitive in terms of price. So sourcing of vehicles from countries where costs are lower and quality is better, is turning out to be the best alternative. Munjal expects to achieve a turnover of $70 million a year through this partnership, which will last at least for the next eight years. He is investing Rs 135 crore in setting up assembly lines for the Aprilia scooters in his Ghaziabad facility with the hope that it will help leverage his company into the international market as a leading two wheeler maker. Munjal has big plans, but we’ll have to wait and see if this hero makes some good profits also, or this route is one that drives up, simply the dust.

Filmy focus

The tycoon Kumaramangalam Birla whose entertainment company, Applause Entertainment was already busy with its share of Hindi films, has now got into the swing of things really well, it seems. It has become the first Asian company to acquire a multi million-dollar contract from Warner Bros, to provide the special effects for the third part of the trilogy, The Lord of the Rings-The Return of the King. Considering the second part of the movie just walked off with the Oscar for best visual effects this year, the challenge for Birla is tremendous. To meet up to the expectations and perhaps walk off with next year’s Oscar too! Birla is chasing a rather ambitious benchmark, but then, that’s his style. Meanwhile, the tycoon who entered the entertainment sector because he felt it was a fast growing business, is also happy with his focus on television software. While he considered it a safer option for a newcomer, it is equally tough, as he must compete with the likes of Balaji Films and UTV. But the big ticket areas aside, Birla is also working on 2D animation, special effects and films. He is already producing Sanjay Leela Bhansali’s Black, and insiders disclose that a joint venture with Ram Gopal Varma to produce South Indian language films, is also on the assembly line. With so much on his plate, one wonders if the tycoon just hasn’t got his fingers in too many pies. But for a Birla with a giant appetite, staying out of one of the worlds fastest growing industry segments, is the only thing he could not afford.

Dilip Cherian runs public relations firm Perfect Relations. Mail to dilipcherian@now-india.net.in