Have you ever heard the sound of silence? It could be devastating at times. Because silence often kills...slowly...softly...and without remorse. And you can’t even hit back. Have you ever heard of the conspiracy of silence? I’ll get back to you on this...
Last week, Delhi’s industrial neighbourhood Gurgaon woke up to a lot of noise. Agitating workers of Japanese two-wheeler manufacturer Honda Motorcycle & Scooter India Ltd (HMSI) pelted stones at local cops. And the cops hit them back. Television channels went live with action drama. Communist rabble rousers raised a stink. Chambers of commerce and industry associations cried foul. And governments in Delhi and Chandigarh were rudely woken up from their siesta. Gurgaon had never witnessed so much noise before. In India’s 15 years of industrial change, Gurgaon had remained an ocean of calm. And into this ocean, Japanese industrial nameplates have cultured their oyster pearls. Last week, that calm got broken as the Japanese came under attack. Nobody missed the bang.
Yet, amidst all the noise and fury, my ears were pierced with the defeaning sound of silence. I was concerned. Because, for as long as I can remember, I never expected Brijmohan Lall to be this quiet. After all, it’s been years since he’s been an industry elder. I would love to hear him protest.
“Don’t sniff around for conspiracy theories where there are none,” a colleague warned me at the mention of the venerable Brijmohanji, an octogenarian rags-to-riches legend who takes home one of corporate India’s fatest pay cheques.
“Have you ever heard of the conspiracy of silence,” I asked. I have known Mr Brijmohan Lall since I cut my teeth in journalism. Despite his fabulous wealth, he remains a modest man. He is also very sharp. Not given to flaunting his achievements. But he’s not particularly silent either. Sometime in the ’80s Mr Lall went to town that the Guinness Book of Records had listed him as the world’s biggest bicycle manufacturer. For a partition refugee who relocated to Ludhiana to hammer bicycles into shape, Hero Cycles was quite an extraordinary achievement, Guinness, or no Record. Of course, I remain highly curious about when exactly Hero Cycles entered the Book. Every company official I have asked doesn’t seem to know.
The ’80s also saw India upgrade to motorbikes from cycles and Mr Brijmohan Lall sign up a very successful JV with Honda. Things fell so nicely into place that in just a decade, Hero Honda became India’s No.1 two-wheeler manufacturer taking the steam out of the Bajaj scooters. Another half a decade or so, and Hero Honda emerged the world’s No.1 motorcycles company, beating partner Honda of Japan hands down. There’s reason for this: Motorcycles, the world over, are no longer commuter vehicles. They are a fashion statement for sporting buffs. So, volumes don’t matter; technology commands a premium. In India, Mr Lall converted low-end motorbikes, first into urban commuter vehicles, and then, took them into the rural heartland, where poor roads made motorcycles, and not scooters, the preferred mode of travel. They got him the volumes and a hefty bottomline.
With a new market opening up Honda wanted a larger slice of the business, but Mr Lall wasn’t willing. So, in the mid-90s, Honda put in an application for a 100% venture. At first, Mr Lall didn’t budge. He lobbied the government to restrict the entry of MNCs that already had an Indian partner. That’s how Press Note 18 came about. Honda finally smoked the peace pipe with Mr Lall and settled to carve up the market between them —Hero Honda in the low-end high-volume segment and Honda Motor foraying the market for higher-end bikes and scooters. The arrangement’s worked well so far. But it’s also a cause for concern. In the six years that it’s been in the market, Honda has pipped Bajaj Auto as the country’s biggest scooter manufacturer. Also, in the motorcycles space it has been herded into, Honda beat Hero Honda, manufacturing 34,312 bikes in the 125-250 cc segment in the April- June 2005, against half that number by Hero. Of course, it’s another matter that Hero sells many more motorbikes in the 75-125 cc space where its nearest competitor Bajaj Auto sells less than half its numbers and Honda, on its own, has no presence.
Still, it’s only a matter of time...
Now, if I were ever in the race for marketshare, I would be a worried man. And I see no reason, why Mr Lall shouldn’t be worried. That’s when enter the Hand of God. Or the Hands of the Haryana cops! Disruption of competitor’s business is always music for the harried. You can clearly hear that in the sound of silence.
Mr Lal is an honourable man. I dare not call him a conspirator. But I am entitled to eavesdrop into his conspiracy of silence. What?
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