 "Niranjan Gupta, Hero MotoCorp CEO")
Hero MotoCorp will launch mid-segment and budget-segment electric scooters in FY25, Chief Executive Officer (CEO) Niranjan Gupta said on Wednesday. Until March 2024, the company will focus on expanding the distribution of its premium electric scooter Vida to approximately 100 cities he said.
Gupta, who took charge as Hero MotoCorp CEO on May 1, said the company plans to expand the commuter motorcycle segment, wherein it has a 65-70 per cent market share. The commuter segment comprises bikes that have up to 125 cc internal combustion engine (ICE).
“Our role is to grow the commuter segment because classically, in any industry, when you have such a share, your role is to grow the category rather than just defend the share,” he told reporters.
He said the board has given him the mandate to increase the pace of the company's growth. “The brand is very strong and we have got scale, but what is required is changing the gears... Speed is the name of the game. It is better to make a wrong decision than not take any decision,” he noted. Hero MotoCorp's domestic sales jumped by 11.2 per cent year-on-year to 5.16 million units in FY23.
India’s largest two-wheeler maker will be launching a premium motorcycle every quarter in FY24. “When you are a commuter brand, you cannot enter the premium segment with just one model and claim credibility,” he mentioned. "You need a portfolio to be called a premium player. That is why you will see a number of premium model (bikes between 160cc and 450 cc) launches this year.”
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The consumer at the premium end is more discerning than the one at the commuter end and “therefore, you need to have a different type of retail experience. Therefore, the company would be launching a certain number of exclusive stores to showcase just its premium ICE-based products,” he mentioned. These exclusive stores may be named differently than the usual dealerships.
“Our collaboration with Harley-Davidson is also to imprint in people’s minds that we are a premium player,” he added. Hero had in 2020 signed an agreement with the American company to develop and sell a range of premium motorcycles under the Harley-Davidson brand name.
The CEO said that under the company’s “Hero 2.0 campaign”, it would be refurbishing up to 40 per cent of its 1,000 primary dealerships across the country. “These refurbished stores will have premium ICE-based vehicles as well as electric scooters,” he said.
Hero MotoCorp had in April announced a voluntary retirement scheme (VRS) to build a “robust organisation in a rapidly evolving dynamic environment”. The CEO informed that 10 per cent of 4,000 employees in the management have taken VRS. “It allows the talent to churn because you need people who are fit for the organisation,” he explained.
Why did the company first launch a premium electric scooter last year? “Because it is easier to move from the premium EV segment to the mid and bottom EV segments. In the four quarters of FY25, we would be launching vehicles in the mid and bottom EV segments,” he said.
The CEO said the company is right now focused on getting the business right in the EV segment. Spinning off the EV branch as a separate company can be evaluated at a later stage, he replied in response to a question on the matter.
With the government revising FAME-II subsidies, Gupta said there will be consolidation in the electric scooter segment. “Hero MotoCorp is well placed to thrive even in such a market,” he said.
The export market is just 5 per cent of Hero MotoCorp's total revenues. The company is present in more than 40 countries. The CEO said that Hero MotoCorp plans to focus on 8-10 big markets, such as Mexico, Colombia, Nigeria, Bangladesh, Nepal, and Sri Lanka, by “disproportionately putting our efforts there”.
Gupta said that over the past month, he has been walking across the floors of his office to talk to employees directly and see what they are up to. “Sometimes all you need is just a pat on the back,” he added. The company has also launched a direct-to-CEO app through which employees can directly write to Gupta and submit their innovative business ideas. Gupta said he has received more than 100 business ideas, so far.
