Hero MotoCorp to drive in mid, budget-range EVs in FY25: CEO Gupta

Chief Executive Officer (CEO) Niranjan Gupta said on Wednesday that Hero MotoCorp will launch mid-size and budget electric scooters in FY25. Until March 2024, the company will focus on expanding Vida’s premium electric scooter distribution to around 100 cities.

Gupta, who took over as CEO of Hero MotoCorp on May 1, said the company plans to expand the passenger motorcycle segment, where it has a 65-70 percent market share. The commuter segment consists of bicycles with up to 125 cc internal combustion engine (ICE).

“Our role is to grow the passenger segment because traditionally, 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 of directors gave him a mandate to accelerate the company’s growth. “The brand is very strong and we have a wide range, but what is needed is a change of gears… Speed ​​is the name of the game. It is better to make a wrong decision than to make no decision,” he noted. Hero MotoCorp’s domestic sales jumped 11.2 percent year-on-year to 5.16 million unit in fiscal year 23.

India’s largest two-wheeler manufacturer will launch a premium motorcycle on a quarterly basis in FY24. “When you are a passenger brand, you cannot enter the premium segment with just one model and claim credibility,” he said. “You need a portfolio to be called a premium player. That’s why you’ll see a number of premium models (bikes between 160cc and 450cc) being launched this year.”

The consumer at the premium end is more discriminating than the consumer at the commuter end, and thus, “you have to have a different kind of retail experience. Therefore, the company will launch a certain number of exclusive stores to showcase its premium ICE-based products only.” These exclusive stores may be named differently from the usual dealerships.

“Our collaboration with Harley-Davidson is also an imprint on people’s minds that we are a premium player,” he added. In 2020, Hero signed an agreement with the American company to develop and sell a range of luxury motorcycles under the Harley-Davidson brand name.

The CEO said that as part of the company’s “Hero 2.0 campaign,” it will refurbish up to 40 percent of its core 1,000 dealerships across the country. “These renovated stores will have high-quality ICE cars as well as electric scooters,” he said.

Hero MotoCorp in April announced a Voluntary Retirement Scheme (VRS) to build a “strong organization in a dynamic, rapidly evolving environment.” The CEO reports that 10 percent of the department’s 4,000 employees have taken VRS. “It allows the talent to shift because you need the right people for the organisation,” he explained.

Why did the company debut a premium electric scooter last year? “Because it is easier to move from the premium electric vehicle segment to the middle and lower segments of electric vehicles. In the four quarters of fiscal ’25, we will launch vehicles in the middle and lower segment of electric vehicles.”

The CEO said the company is now focused on getting the right business in the electric vehicle segment. He replied in response to a question on this subject, while managing the electric car branch as a separate company that can be evaluated at a later stage.

With the government’s review of FAME-II support, Gupta said there will be consolidation in the electric scooter sector. “Hero MotoCorp is well positioned to thrive even in such a market,” he said.

The export market represents only 5 percent of Hero MotoCorp’s total revenue. The company is present in more than 40 countries. The CEO said that Hero MotoCorp plans to focus on 8-10 large markets, such as Mexico, Colombia, Nigeria, Bangladesh, Nepal and Sri Lanka, by “disproportionately putting our efforts there”.

For the past month, Gupta said, he’s been walking across his office floors to talk to employees directly and find out what they’re up to. “Sometimes all you need is a pat on the back,” he added. The company has also launched a direct to CEO app through which employees can write directly to Gupta and present their innovative business ideas. Gupta said he has so far received more than 100 business ideas.