In the next two years, a bike jointly developed by Hero MotoCorp and Harley-Davidson could be released to the public, as stated by Niranjan Gupta, CFO of Hero MotoCorp.
Hero MotoCorp’s launch is helping the company become a stronger presence in the premium market. The country’s largest two-wheeler maker has been successful in the budget bike segment (100-110cc) and now wants to focus on models that will bring in volumes and enhance profitability in the 160cc and above space.
“Over the next two-year timeframe, you will see models which are in the volume segment and the profitable segment of the premium as well, including the platform that we are developing jointly with Harley,” Gupta said during an analyst call.
He added that the company is building a strong pipeline of premium products and models in this segment will be launched annually.
“This will help us build market share in the premium segment and boost profitability over the medium term,” Gupta further said.
Hero MotoCorp, an Indian brand, and American company Harley-Davidson announced a partnership in October 2020 for the Indian market.
Under the new deal, Hero MotoCorp will develop and sell a range of premium motorcycles under the Harley-Davidson brand name in India. In addition, it will take care of service and parts requirements for Harley bikes sold in the country.
The company is also responsible for selling Harley accessories, riding gear, and apparel through a network of exclusive dealers and its existing sales network.
Gupta elaborated further, saying that the company has been focusing on growing its Parts, Accessories, and Merchandise (PAM) business in recent quarters. He also said-
“The PAM business revenue for the first half was at ₹2,300 crores, registering a growth of 45 percent. The business revenue now accounts for 13.7 percent of revenue, and we aim to increase it to 15 percent.”
Gupta commented that there were headwinds in the business outlook linked to inflation and consequent interest rate increases. While discussing further, he stated-
“However, we do believe that the inflation and rate cycle may be close to peak now. Return of growth in developed markets may take a while but India clearly is relatively much better placed with a strong consumption base, favorable demographic profile, and significant headroom for per capita consumption relative to other countries”.
The recent increase in spending across categories during the festive season reflects the return of consumer confidence and bodes well for industry growth, Gupta stated.
We can’t wait to see what Hero MotoCorp and Harley-Davidson have in store for us with this new joint venture. It’s sure to be an exciting journey!
Shivendra Tiwari is an Engineer and an MBA in Marketing. He is the Content head at Marketing91 and a thorough Online Marketing enthusiast. Shivendra loves to follow different brands and study their Business and Marketing tactics.