Hero MotoCorp Limited, which made its name in commuter motorcycles, is upping the ante in the premium motorcycles segment, (250cc to 500cc models). Apart from ramping up the capacities of models launched last year such as the Karizma XMR, Hero Mavrick 440 and Harley X440, the company is looking at sales and distribution strategies to augment sales.
“FY 2023-24 has been the year of maximum number of launches while making big strides in the premium segment. We are now working on (increasing) the Premia (retail) stores (for higher-end bikes), the (Hero) 2.0 upgrade, digital journey, customer experience, etc. So, it is a full 360-degree approach to ‘Winning in Premium’ segment,” said CEO Niranjan Gupta. He added, “You will see some more forays into premium segment as well.”
Hero MotoCorp had lunched the Karizma XMR (at an ex-showroom price of Rs 1.72 lakh), Harley Davidson X440 (Rs 2.29 lakh),and most recently Hero Mavrick 440 (Rs 1.99 lakh).
“One of the segments where we can see an increase in the marketshare by a good quantum, and I would not lay out the number, is the premium one because we have launched three big brands—Harley-Davidson X440, Mavrick 440 and Karizma last year. This year, we are going to put investments behind scaling them up and brand building," Gupta told analysts in a post-earnings conference call.
The country’s largest two-wheeler manufacturer is looking to grow its market share in the premium range of motorcycles, from around 5 percent in the last fiscal. While it upgraded its network with the appointment of 75 Premia outlets (until March-end) and the launch of over 400 Hero 2.0 stores, it is also working on more variants of its existing premium bikes.
Hero MotoCorp's Premia chain of dealerships currently houses the brand's premium motorcycles such as the Mavrick 440, X440, and the Karizma XMR, in addition to its electric scooter Vida V1.
Gupta said Hero would now focus investments to build awareness about its premium offerings. "So, across the board, you can see that acceleration in the actions, very confident about our premium journey now,” he said.
Gupta had earlier indicated that the company would ramp up its Premia outlets to 100 by June-end. In his view, the demand for premium motorcycles is not only coming from metros but also from tier-II and -III areas.
Replying to a question on the response to the higher-end motorcycles, Gupta said, “We did say that we want to increase the capacity to 10,000 per month of these three brands. In another one or two months... we will have 10,000 units per month capacity from a supply point of view.”
Talking specifically about the individual brands, he said, “Karizma (XMR) had a good response and it is building up. Mavrick sales have just started and the Harley-Davidson X440 is actually moving up as we are expanding to more stores.” The company claimed that it has established the Harley-Davidson at about 10 percent market share in areas it has been made available.
Talking about other segments, Gupta revealed that after the Xoom 125, the company is gearing up to launch the Xoom 160. The new ICE scooter debuts in the first half of the financial year. “We can confidently say that we are poised for accelerated growth moving forward for FY25 and beyond," Gupta said.
Going forward, Gupta said that Hero will consistently grow volumes, thereby improving operating leverage, aggressively grow its premium portfolio, take its PAM or parts, accessories and merchandise business growth into double digits, and intensify cost saving initiatives across the value chain.
“While we do all this, we will continue to invest behind new products and segments including EVs (electric vehicles) and premium, going digital to enhance customer buying experience and new product development,” he said.
Early this year, Gupta indicated that Hero will be launching three electric two-wheelers this fiscal, including an affordable variant of the Vida electric scooter. As Gupta put it, “We continue to expand in our EVs, where we continue to build the infrastructure, which is 180-plus dealers, and we have expanded to 120-plus cities."
To a question on the sales target for this year, Gupta noted, “We won’t go as far as to call out the numbers on the volume guidance. We are fairly confident about our double-digit revenue growth. Now what shape and mix of volume and price and mix and all that happens, that one we will see how the industry navigates through.”
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