Hero MotoCorp to Deepen Premium Strategy with New Products, Retail Expansion

Hero MotoCorp is sharpening its focus on India's fast-growing premium motorcycle market, betting on new products, an expanded premium retail network and overseas growth while strengthening its position in the 150-350cc segment as demand shifts toward higher displacement models.

In its annual report, the country's largest two-wheeler maker noted that premiumisation continued to reshape the Indian motorcycle market in the previous financial year, with the premium segment growing 18% year-on-year, outpacing the broader industry.

Consumer demand has increasingly shifted towards higher displacement motorcycles and scooters since the pandemic, aided by rising incomes and a preference for feature-rich products.

Hero MotoCorp said the sub 350cc segment has emerged as the industry's "sweet spot" after changes in the GST structure lowered the entry barrier for first-time premium buyers and encouraged existing customers to upgrade. 

By contrast, motorcycles above 350cc have seen slower growth following higher tax rates, although manufacturers have largely absorbed the additional costs to keep prices stable.

To capitalise on this demand trend, Hero MotoCorp plans to introduce new motorcycles under both the Hero MotoCorp and Harley-Davidson brands during the financial year 2027 to expand its presence in the 150-350cc segment.

The company has already broadened its premium portfolio with products such as the Xtreme 250R, Xpulse 210 and Karizma XMR, while the Harley-Davidson X440 continued to gain traction during the year. 

The shift toward premium motorcycles is also contributing to profitability. Hero MotoCorp’s EBITDA margin improved to 14.7% during the year on the back of favourable product mix, premiumisation, cost optimisation and operational efficiencies.

The strategy extends beyond India. Hero MotoCorp said its expansion into the UK and the EU is anchored by a Euro 5+ compliant premium motorcycle portfolio. 

The company entered Italy, Spain and France with products including the Hunk 440, Xpulse 200 4V and Xpulse Pro, positioning premium motorcycles at the centre of its international growth plans.

Supporting the premium push is the Hero Tech Center in Munich, Germany, which focuses on developing advanced powertrains and technologies for the company's premium products. 

Alongside its Centre for Innovation and Technology in Jaipur, the facility forms the backbone of Hero MotoCorp's global research and development network.

Hero MotoCorp is also investing in a differentiated retail experience for premium customers. During the year, it added 50 Hero Premia outlets, taking the network to 130 stores across 115 cities. 

It also upgraded 490 dealerships to its Hero 2.0 format, a technology-enabled retail concept designed to improve customer experience, while expanding premium reach across urban markets.

The company said it expects the momentum in the sub-350cc category to continue and sees the segment as a key growth opportunity for its premium motorcycle business in the coming years.