Hero MotoCorp to open 100 exclusive stores for premium models in FY24

Hero MotoCorp on Monday said it plans to open more than 100 exclusive stores for premium models in 2023-24 at “prime” locations across the country to provide “sensorial experience” to customers.

The company plans to launch a premium motorcycle model (within 150cc-450 cc) in each quarter of 2023-24, its CEO Niranjan Gupta had said last week. Hero has about 9,000 touch points, including 1,000 primary dealerships in India.

Apart from establishing a product portfolio to “win” in the premium segment, the company will develop a premium brand image and elevate customers’ retail buying experience, it said in an investor presentation on Monday. Currently, Hero MotoCorp’s brand is associated with the commuter segment of two-wheelers.

India’s largest two-wheeler maker said it was dealing with chip shortage in the electric scooter segment by developing multiple sources and establishing “direct relations with tier-3 and tier-4 suppliers”. Currently, Hero sells one electric scooter in India: Vida V1.

To deal with chip shortage, the company is doing “continuous monitoring” and establishing “long-term agreements” with suppliers, it stated. The chip supply to Indian auto companies has improved in the last few quarters, but it is yet to reach pre-pandemic levels.

Hero said it has validated and finalised supply of cylindrical cells (for battery) from LGES, Samsung SDI, and Panasonic and it is investigating other cell chemistries. Hero is testing new cell sources such as “Bak and Svolt”, both Chinese companies.

Hero MotoCorp’s domestic sales jumped 11.2 per cent year-on-year to 5.16 million units in FY23. It said in FY24 and beyond, it plans to focus on additional revenue channels such as engine oil and fork oil. To boost profitability, the company plans to “consolidate indirect buying” of parts.

In the presentation, Hero said it plans to “comprehensively” address the 125 cc segment for internal combustion engine-run motorcycles as well as scooters by launching multiple models.

The export market is 5 per cent of Hero MotoCorp’s total revenues. The company is present in more than 40 countries. The CEO had last week said 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”.