WionDrive News Desk 
Hero MotoCorp, India’s largest two-wheeler manufacturer, anticipates another year of double-digit growth in the two-wheeler industry. Positive macroeconomic factors, robust replacement demand, and easy access to financing are expected to drive industry growth beyond 10% in the current financial year.
Despite sluggish rural demand, the domestic two-wheeler industry rebounded with a 17% growth in FY23, reaching 15.7 million units. This resurgence followed three consecutive years of decline due to the pandemic and economic stagnation.
Niranjan Gupta, Hero MotoCorp’s newly appointed CEO, highlighted the promising economic indicators, including government-led infrastructure investments, strong agricultural crops, robust GST collections, and adequate water reservoir levels. These factors are poised to boost consumer sentiment, employment, and overall two-wheeler industry growth.
Rural demand, constituting 50-60% of commuter segment two-wheeler sales, plays a vital role, and Hero MotoCorp aims to further penetrate this market, attract first-time buyers, expand retail financing, and leverage its extensive network.
Regarding recent price hikes, Gupta acknowledged commuter segment challenges due to cost inflation and pandemic impact, resulting in over a 30% price increase. Adjusting to these pricing levels may take time, but gradual consumer confidence recovery is expected to stimulate growth.
Retail finance penetration has improved, standing at 60% compared to 47% in FY20. This mitigates cost inflation’s impact and promotes sales of premium variants within the same brand. Hero MotoCorp also plans to update its retail format, transitioning 500 stores to a new format within two years.
Business Expansion
Hero MotoCorp is diversifying within its core business of commuter 100cc-125cc motorcycles and aims to regain market share in the 125cc segment. The company relies on feature-rich XTEC variants, comprising 25% of its portfolio, with models like Super Splendor XTEC gaining a 3% market share within three months of launch.
In the scooter segment, the company introduced the Xoom model, receiving a positive response. It plans to launch several new models in the 100cc and 125cc scooter categories to increase market share in FY24.
Hero MotoCorp also aims to strengthen its presence in the premium segment, currently holding a 3% market share. Upcoming launches, including a collaboration with Harley Davidson in the 440cc segment, and over 100 exclusive premium product stores in the next year, demonstrate the company’s commitment to expansion.
