Discounts on Hero motorcycles and scooters could be the highest during this season as Bajaj anticipates. It has to liquidate massive number of BSIV vehicles…
Most of the motorcycle manufacturers appear to be fairly well placed in this transition from Bharat Stage IV to Bharat Stage VI, which kicks in from April 2020. Or at least they look confident at this point of time. However, this transition will be immensely challenging for Hero MotoCorp as we have discussed in this story.
But before that, Hero has an even bigger task to take care of. It has to dispose of the highest number of BSIV motorcycles and scooters it is currently sitting on (and the ones it will produce before this transition).
Arch-rival Rajiv Bajaj believes this number will be over one million vehicles. He believes that Hero will launch ‘mother of all schemes‘ by the end of this month. He says that Hero has to get rid of these BSIV products well in time otherwise it will land itself in trouble closer to April 2020. According to what we have learnt, Hero is already sitting on a dealer level inventory of over two months.
Bajaj anticipates that this massive discount will shake up the industry and they have to get ready to combat that.
These are teasing times for India’s top manufacturer as it also has to take care of planning its BSVI transition productwise and one wrong step can have a deep impact on its sales. It is also urging the government to slash GST on two-wheelers to 18 percent (more details).
Why it is the toughest for Hero?
As we mentioned earlier, the first reason is that it has (and will have) the highest inventory to liquidate. The second reason is because Hero solely depends on sale of its 100-125cc commuter motorcycles and scooters which are the bought by cost-conscious buyers. And any kind of price increments (which will be necessitated by BSVI upgrades) will impact buyers of 100-125cc products more than the costlier, higher segments.
Source – CNBC TV18