Hero MotoCorp, the world’s largest two-wheeler maker by volume, is optimistic about the industry’s growth prospects in the current financial year. The company expects the industry to grow beyond 10 percent, driven by buoyancy in urban and rural sentiments.
Hero MotoCorp is also planning to deepen the penetration of two-wheelers by attracting first-time buyers, increasing retail financing penetration, and leveraging its vast network.
The company is also looking to upgrade its existing retail format and expand the categories in its core business of commuter 100cc-125cc motorcycle segments.
Here are some of the key factors are expected to drive the growth of the two-wheeler industry in the current financial year:
- Positive macroeconomic indicators: The Indian economy is expected to grow at a healthy pace of 7.5 percent in the current financial year. This, coupled with the government’s focus on infrastructure development, is expected to boost consumer sentiment and drive demand for two-wheelers.
- Strong replacement demand: The two-wheeler industry is also expected to benefit from solid replacement demand. The average age of two-wheelers in India is currently around 10 years. This indicates a large pool of old two-wheelers are due for replacement.
- Ample finance availability: The availability of affordable finance is another key factor is expected to drive the growth of the two-wheeler industry. Hero MotoCorp has partnered with several financial institutions to offer easy financing options to its customers.
More factors
- Healthy demand scenario: The two-wheeler industry is expected to benefit from a healthy demand scenario in urban and rural areas. In urban areas, the growth will be driven by rising incomes, increasing urbanization, and a growing preference for personal mobility. In rural areas, the growth will be driven by rising farm incomes, government initiatives to boost rural demand, and increasing penetration of two-wheelers in rural households.
- The favourable base effect from the last year: The two-wheeler industry is expected to benefit from a favourable base effect from the last year. In the previous financial year, the industry had witnessed a decline in sales due to factors such as the COVID-19 pandemic and the economic slowdown. As a result, the industry is expected to register double-digit growth in the current financial year.
- Macroeconomic indicators looking positive: The macroeconomic indicators look positive, which is expected to boost the demand for two-wheelers. The Indian economy is expected to grow at a healthy rate of 7.5% in the current financial year. This, coupled with low inflation and rising incomes, is expected to boost the demand for two-wheelers.
Here are some of the key factors contribute to Hero MotoCorp’s growth in the coming years:
- Strong economic growth: India’s economy is expected to grow healthy in the coming years. This will lead to an increase in disposable incomes, which will boost demand for two-wheelers.
- Rising urbanization: India is rapidly urbanizing, leading to an increase in the demand for two-wheelers in urban areas.
- Growing middle class: India’s middle class is growing rapidly, leading to an increase in demand for premium two-wheelers.
- Government initiatives: The government is promoting the use of two-wheelers, such as providing subsidies for electric two-wheelers.
Conclusion
Hero MotoCorp is well-positioned to capitalize on the growth opportunities in the two-wheeler industry. The company has a strong brand name, a vast distribution network, and a product portfolio caters to different market segments.
Hero MotoCorp is also committed to innovation and is constantly developing new products and technologies to meet the evolving needs of its customers.
