"I see significant growth potential in segments such as Global Business and Electric Mobility," said the Executive Chairman of Hero MotoCorp.
20 Jul 2024 | 3819 Views | By Kiran Murali
Building on the strong ICE business that the company has set in the domestic market, Hero MotoCorp is now looking at global business and electric vehicles as strong revenue drivers in the long term.
"I see significant growth potential in segments such as Global Business and Electric Mobility. Despite ...
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Building on the strong ICE business that the company has set in the domestic market, Hero MotoCorp is now looking at global business and electric vehicles as strong revenue drivers in the long term.
"I see significant growth potential in segments such as Global Business and Electric Mobility. Despite fluctuations in the global economy, these areas are poised to become strong, key revenue drivers in the long term," Hero MotoCorp Executive Chairman Pawan Munjal told shareholders in the annual report.
Unlike its competitors – Bajaj Auto, Hero MotorCorp's share of exports in its total revenue is still in the low-single digits and has a good headroom to improve its business. The company has a presence in 48 countries and exports accounted for 3.9% of its Rs 37,456 crore revenue in the financial year 2024.
It noted that its strategic efforts stood when the global two-wheeler industry faced challenges, particularly in Nigeria, and South Asia and Africa. "Recognising the dynamic shifts in the market landscape, we strategically increased investments in brand building, network expansion, and customer engagement across our top 10 markets," the company said.
In the previous financial year, Hero MotoCorp set up a new subsidiary in Brazil with plans to invest in the manufacturing and distribution of two-wheelers, including parts and accessories.
Entry into the Philippines marked a significant milestone in its Southeast Asia export strategy as the country with an industry volume of 2.25 million units presents a significant opportunity in the area. The company is also exploring additional prospects in other key Southeast Asian markets.
In Nepal, the automaker opened a new assembly facility with its distributor partner CG Group, while in Bangladesh, the company is focusing on penetrating the premium segment and expanding its core segment.
Hero MotoCorp's market share in exports from India increased to 5.8% from 4.7% during 2023-24. The automaker exported 2 lakh units during the year, up from 1.7 lakh units in 2022-23. The company launched 12 new and refreshed products in the International Market last year.
"Through our revitalised efforts in global business, we have achieved promising outcomes. With a renewed strategic focus, we anticipate an upward trajectory in the share of global sales contribution to our overall revenues," Munjal said.
Meanwhile, Hero MotoCorp is gradually scaling up its electric vehicle business in India by expanding the presence of its products and improving the charging infrastructure in partnership with Ather Energy.
The company offers its electric two-wheelers under the Vida brand. Its electric vehicle portfolio currently has only one product- V1 which comes at a starting ex-showroom price of around Rs 1 lakh now. V1 is now available across 100 cities and 150 dealers.
"I am particularly pleased to witness VIDA V1's rise as one of the leading electric scooters in India, and I anticipate its future launch in global markets, where it is poised to become a significant player as well," Munjal said.
Hero MotoCorp is planning for a portfolio of four models by the end of this financial year as it looks to grab a larger pie of the electric vehicle market. The portfolio is likely to include two new electric scooters at lower price points, one business-to-business product for last mile connectivity business and a refreshed model of V1.
"We want to build leadership in electric vehicles, and in order to do that, we will be creating a very powerful EV product portfolio, augmenting the VIDA V1 Pro that we have today," Chief Executive Officer Niranjan Gupta said.
In the coming five years, the automaker is expected to launch over a dozen models across different segments and price points. The company also intends to have a portfolio of six electric motorcycles under the Vida range and another four motorcycles under its alliance with Zero Motors starting from 2025-26.
Hero MotoCorp is also working with Ather Energy, in which it has around 44% stake, to improve the electric vehicle ecosystem in the country. They have set up close to 2,000 fast-charging points across 200 cities in India.
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