New Delhi: Hero MotoCorp, the world’s largest two-wheeler manufacturer, has revived its two decades-old strong brand Karizma to prop up its dominance in the Indian market. The move is part of Hero’s strategy to excel in the rapidly growing premium two-wheeler segment in the country.
The premium segment expanded twice the rate of the commuter segment last year. To thrive in this fast-growing segment, it is important to have the right products, and Hero has kick-started product introductions one by one, Niranjan Gupta, Chief Executive Officer of Hero MotoCorp, told a group of journalists on the sidelines of the Karizma XMR launch.
“”Our goal is to swiftly create a full portfolio of premium offerings. Over the next six to eight quarters, we plan to introduce a new product every quarter in the premium segment,” he said.
According to the data released by the Society of Indian Automobile Manufacturers (SIAM), the commuter segment (engine capacity >75 CC but less than or equal to 110 CC) grew by 5.3%, while the performance segment (engine capacity >150 CC but less than or equal to 200 CC) increased by 33% in FY23.
Industry experts believe that Hero MotoCorp’s decision to reintroduce Karizma with its original branding from 20 years ago is a direct appeal to nostalgia. Similar to what Mahindra & Mahindra did with the Thar, and Tata Motors with the Safari, Hero MotoCorp is leveraging the fame of Hrithik Roshan and the legacy of Karizma XMR to spearhead its premium journey.
The new Karizma XMR will compete with models like the Suzuki Gixxer SF 250, Yamaha R15, and Bajaj Pulsar RS 200.
Avik Chattopadhyay, a branding expert and the Founder of Expereal, points out that the Karizma XMR serves as Hero’s response to the influx of new “affordable premium performance” bike brands entering the segment. An early entrant 20 years ago, Karizma had lost its appeal against competitors like KTM and TVS.
Chattopadhyay believes that this marks Hero’s renewed attempt to position itself as a “masstige” brand, much like Maruti Suzuki in the passenger vehicle category. The success of Maruti Suzuki likely motivated Hero to make a fresh attempt with the Karizma XMR, rectifying past unsuccessful endeavours. The new effort is poised for success if it caters to the mindset that seeks premium riding experiences without compromising on cost-effectiveness.
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Beyond metros to Tier-I and Tier-II cities
The Gurugram-based Hero MotoCorp has launched the Karizma XMR at an aggressive price of INR 1.73 lakh aiming to win customers not only in the metros but also in Tier-I and Tier-II cities.
Niranjan Gupta believes that the aspirational India is not confined to the urban areas. He points out that with the predominance of digital media and their impact, aspirations spread far and wide. Moreover, the brand’s nationwide availability and established trust boost demand further.
As the leader in the commuter segment with brands like Splendor and Passion, Hero MotoCorp is ambitiously planning to establish a comprehensive premium product portfolio ranging from 160cc to 450cc. The company intends to create a separate premium distribution channel, as it holds only a 4-5% share of the premium motorcycle market.
“We will give our stores a facelift, introducing Hero 2.0 in almost 500 stores within the next eight quarters,” Gupta said.
These changes involve enhancing the existing stores and establishing around 100 exclusive premium stores in the next four quarters. This strategy encompasses not only product and portfolio focus but also a comprehensive 360-degree approach to excel in the premium segment, he added.
In the past three months, the company launched three premium motorcycles (above 150cc): the Xtreme 160R 4V, X440, and Karizma XMR. For the current fiscal, the company has allocated INR 1000 crore for capital expenditure (capex), with a significant portion directed to premium motorcycles and electric vehicles.
