Hero MotoCorp to ride on multiple launches to participate in growing premium motorcycle market
India’s largest two-wheeler maker confirms test drives for its premium EV offering Vida S1 and Vida S1 Pro will commence shortly this month.
Hero MotoCorp, the country’s largest two-wheeler maker is accelerating its push in the premium end of the market with multiple product actions in the coming years with an eye on the adventure sports segment.
This push comes at a time, when its bread-and-butter mass market segment is under a prolonged stress and the premium motorcycle buyers remain relatively insulated to inflationary pressures. Sources say Hero plans to participate in the 300 cc segment with two new models by the first half of FY24.
Hero is focused on premiumisation of its portfolio and it expects to launch one premium product every year from hereon to drive profitability. With the easing of the supply chain the company management sees this space as a profitable segment and aims to drive more volume to increase its market share.
The first of the lot is likely to be the 300 cc+ liquid-cooled engine-powered 'Hero ADV' that will rival the KTM 390 Adventure and the BMW G 310 GS. The second variant could be based on the 'Hero Xtreme 200S' that will rival the TVS Apache RR310 and KTM RC 390.
During an investor call, the company confirmed the development of a joint product platform with Harley in India for its super premium bike range.
On Hero MotoCorp’s premiumisation plans, Niranjan Gupta, Chief Financial Officer said, “Hero MotoCorp will continue to build its presence in the premium segment via multiple launches over the next few quarters.” Gupta did not share any specific product details.
Alternatively, Hero MotoCorp who joined hands with Harley Davidson in October 2020, is organically building its product portfolio. It recently rolled out the new ‘Nightster bike, under the brand's ‘sports’ category.
Hero’s key competitors TVS Motor, Bajaj, HMSI and Royal Enfield have all upped the ante in the premium end of the market with their wide range of offerings including the Honda's CBR 300 and 350 series, BMW’s version of the TVS Apache RR 310 range and retro cruiser Royal Enfield Meteor 350.
According to Society of Indian Automobile Manufacturers (SIAM) data, Hero MotoCorp, which currently has a market share of 47 percent in the overall motorcycle segment, has a miniscule share of five to seven percent in the premium segment with about 47,000 units sold in the first six months of FY23, that too largely in the lower end of market.
Hero MotoCorp recently introduced the Hero Xtreme 160R Stealth 2.0 edition which draws its power from the tested 163 cc air-cooled, fuel-injected engine with XSens technology.
At its Q2 results announced today, India's largest two-wheeler makers’ revenue increased by 7.4 percent YoY to Rs 9,075.4 crore as compared to 8,453.40 crores in revenue in the same quarter last fiscal. The company reported a 9.9 percent year-on-year (YoY) drop in net profit for the September quarter to Rs 716 crore as against a similar net profit of Rs 794 crore in the year-ago period.
Sharing more details about the Q2 performance Gupta said, “Our continued financial discipline, focus on cost savings and capital allocation as well as ensuring premiumisation of our portfolio has helped our performance.”
Already, the likes of Suzuki and Yamaha have taken a strategic call of exiting the mass market segment and shifting focus to higher priced bikes. This has led to improvement of domestic share to 4.4 percent in FY22 from 3.94 percent in FY20 for Suzuki and to 3.81 percent from 3.32 percent in FY20 for Yamaha.
Furthermore, in the under 300 cc category bikes, Yamaha has the FZ25, Bajaj Pulsar 250 Twins and Suzuki Gixxer SF 250 have altogether renewed their plans to further launch new models to stay ahead in the premium segment in view of the slowdown in the mass bike segment.
Vida test ride to start soon
Gupta said that the company will soon start the test drives of its premium EV scooter the Vida S1 and S1 Pro in Delhi, Jaipur and Bangalore. The plan is to extend the roll out to the next eight cities by December. Gupta said the plan is to build the foundation first in the major cities and then “add more cities in our footprint”.
-inputs by Shruti Mishra
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