Premium and electric 2Ws likely to be dominant categories: Pawan Munjal, Hero MotoCorp
The company is on the cusp of developing new-age products for the future.
In recent years, the demand for premium bikes and electric scooters in urban and semi-urban markets has seen substantial growth.
Witnessing the new trend, Hero MotorCorp, the world's largest two-wheeler manufacturer, is on the cusp of developing new-age products for the future, said Pawan Munjal, Executive Chairman of the company.
"The next-gen two-wheelers will address an even broader market in which the electric vehicle segment, premium motorcycles, and scooters are likely to be the dominant categories," Munjal said in a recent company Annual Report. The company has inked partnerships with global brands such as Harley Davidson and Zero Motorcycles to develop a premium range of motorcycles and electric two-wheelers for Indian consumers.
"Premiumisation of our product portfolio gained further pace, with the feature-rich XTEC series doing well across segments and gaining market share. Our R&D ecosystem – which includes the Centre for Innovation and Technology at Jaipur in India and the Hero Tech Centre, Germany – are developing contemporary, state-of-the-art, and technologically advanced mobility solutions for our customers," Munjal added.
Making a maiden move, the Hero-Harley partnership unveiled its much-awaited X440 bike in the mid-size category earlier this month. This is the first premium motorcycle to be introduced under the licensing agreement between the two brands. Available in three variants Denim, Vivid and S - the motorcycle price starts at Rs 2.29 lakh (ex-showroom) and goes up to Rs 2.69 lakh (ex-showroom), making the X440 the most affordable Harley-Davidson bike in India.
Additionally, the partnership with US-based Zero Motorcycles allows Hero to co-develop premium electric motorcycles, leveraging their expertise to create innovative and high-performance EVs. By diversifying its EV portfolio, Hero aims to capture a wider customer base and capitalise on the global shift towards electric mobility.
"The development of VIDA V1 is a step towards making sustainable product offerings. In addition, we have partnered with ZERO Motorcycles and this collaboration combines the expertise of Zero with the scale of manufacturing, sourcing, and marketing of Hero MotoCorp," Munjal noted.
Sharing similar views, Niranjan Gupta, CEO of Hero MotoCorp opined that the premium two-wheeler segment offers huge potential for growth. Last year, this segment grew at 30%, which is twice the growth rate for the company's Entry and Deluxe segments.
"So far, our presence in this segment has been small. We have been developing a full portfolio of premium products over the last three-to-four years and recently launched the Xtreme and Xpulse brands. This year, we have a packed calendar of our premium product launches, more than we have ever launched in a single year," Gupta added.
On the EV front, the company aims to expand its maiden e-scooters Vida V1 to over 100 cities by the end of the ongoing financial year 2023-24. With the objective of 'Building Leadership in EV', the CEO said that the company is working actively to make its electric products accessible to all, leveraging its vast distribution network. "While our first electric vehicle offering was launched in the premium segment, we will soon be expanding our portfolio to cover the mid-market and affordable segments too," Gupta highlighted.
New revenue streams
Going forward, the company will also be diversifying and building new revenue streams. According to Gupta, the company sees its global business as a big growth opportunity. "As per industry averages, global business often contributes nearly 25% of the revenues of our competitors. For us, it is only 5% of our revenues," he pointed out.
In FY 2023-24, Hero plans to expand its presence beyond the current 47 countries, with a focus on Africa and the Middle East due to their economic growth and growing need for two-wheelers. The company also aims to premiumise its brand in Latin America and Asia. "With an established footprint across 47 markets, we will be focusing on rapidly accelerating scale in some of the key ones in the next phase, while continuing to build the remaining markets. Beyond this, we will continue to evaluate other adjacent areas for their business potential. Through these market expansion and product premiumisation initiatives, we hope to enter and establish ourselves in new countries, capitalize on economic opportunities, and strengthen our position as a global player in the two-wheeler industry," Gupta noted.
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