Hero MotoCorp to Focus on Low Cost Bikes

So far we were hearing news about Hero MotoCorp’s plans of coming up with high displacement bikes. In fact, it was for this that the company tied up with Erik Buell Racing. But on the contrary, apart from concentrating on higher end bikes, the world’s largest two wheeler manufacturer is equally interested in coming up with lower displacement bikes to tap the huge potential in the low cost bikes segment.

The company is aiming the buyers who are getting them upgraded by moving to the bikes from  mopeds which they would have been using for a long time. As of now, the cheapest bike in the domestic market is the Hero CD Dawn which is priced at INR 35,000.

But, the segment which HMC is focussing on presently are bikes that’ll be priced merely at INR 20,000 t0 30,000. This is seriously very cheap compared with the present pricing strategy that all the companies follow. Moreover, it’ll primarily be brought close to the rural customers for whom value for money is the ultimate concern. With Bajaj Auto having launched the Boxer 150 in this segment, HMC will take Bajaj head on.

HMC believes that such a product will attract huge mass of customers towards the company. Mr. Pawan Munjal, Managing Director and CEO of Hero MotoCorp said, “We believe that there is a very large mass of customers in that segment — at the bottom of the pyramid. We’re working on trying to come up with something, but it’s not easy with the way costs are going up. But, we will have something.” He then added, “We’ll be looking at prices which are much lower than where we currently are, otherwise it makes no sense. The market is for people who don’t have any (personal) transport at all.”

As part of the company’s new product strategy which is framed post split between Hero group and Japan’s Honda, the company has tied with Erik Buell Racing as I’d mentioned in the very first paragraph and with Austrian power train expert AVL so as to attain technical expertise.

Hero’s increased interest in the mass segment is underlined by the fact that 88 per cent of its 4.53 million two wheeler sales (for the month of April – December 2011) came from the bikes up to 125cc segment. As this segment represents 70 per cent of total domestic bike sales, Hero commands a 45 per cent market share in total.

“It’s easy to make something like a moped, but does that serve your purpose. A moped is not as successful in this country since it is not rugged and sturdy as per the usage our consumers — the kind of loading patterns and driving habits. We have to have a real motorcycle,” Mr Munjal said.

So, will this range of bikes help Hero MotoCorp in scaling new heights? Let’s wait for this product to roll on from the company’s assembly lines to know what it is really capable of.

Regards,
M.Naren.
Author – BikeAdvice.in

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