Looking for the growth that has eluded most of players in the industry in the last few months, Hero MotoCorp, country's largest two-wheeler maker, on Wednesday launched three premium motorcycles, a segment which has grown at a healthy clip in the last few years but one where Hero MotoCorp has traditionally been weak.
The three mobikes-Xpulse 200, Xpulse 200T and Xtreme 200S-is powered by an indigenously developed 200cc single cylinder engine that develops 18.4 PS power and 17.1 NM of torque. It is the most powerful of all Hero's engines in the country so far. The XPulse 200 is priced at Rs 97,000, the XPulse 200T, which is the tourer version, is priced at Rs 94,000, while the Xtreme 200S is at Rs 98,500. A fuel injected version of the XPulse 200 has also been launched at Rs 105,000.
The three launches come in at an interesting time for the company, which has registered muted growth in the domestic market. The company sold 7.6 million two-wheelers in India in fiscal 2019, a growth of 3.12 per cent over fiscal 2018, not too dissimilar to the industry growth of 4.86 per cent. In the last quarter though, the company registered a steep 11 per cent decline in sales at 1.78 million units. It also registered a 24.51 per cent decline in net profit at Rs 730.32 crore during the quarter over last year and a 8-per cent fall in revenue at Rs 7,885 crore. On Tueday, its share price at the Bombay Stock Exchange tumbled 4.84 per cent to hit a 52 -week intra-day low of Rs 2,478 per share.
"The commuter and executive segments are what we call our forte and while we will continue to consolidate our position there, the premium segment offers a great opportunity for growth for us," said Sanjay Bhan, head of sales and after sales at Hero MotoCorp. "We plan to gradually ramp up our presence in the premium segment. It is more of a long-term plan either to be number one or close to number one in the next three to four years as it cannot be done overnight."
The premium motorcycle segment of over 150 cc engine capacity is pegged at around 3 million units per annum. Of the nearly 6.9 million motorcycles that Hero sold in fiscal 2019, more than 99 per cent had engines less than 125cc capacity. This segment however, grew by only 7.6 per cent during the fiscal while the segment just above it, classified as those that have engines between 125cc and 200cc, grew by more than double the rate at 15.4 per cent. Hero's three launches today belong to this segment, which is currently dominated by Hero's three big rivals Bajaj, TVS and Honda.
"We do have ambition and aspiration at segments beyond 200cc as well and we believe that is a segment, though small today, that has a huge potential for growth in future. As a market leader it is our duty to provide whatever the customer wants and we have the in-house capability to do that," Bhan said. "We will keep investing to build the brand and will look at introducing models for the segments above (upto 450cc)."