New Delhi: Hero MotoCorp, one of the largest two-wheeler companies in the world, revealed its strategy to strengthen its position in the Indian auto market using 4S. It is now aiming to expand its footprint both domestically and internationally as per the company’s investors presentation.
The company targets portfolio expansion through market development by becoming a leader in the premium segment by the end of the decade. In this, Hero is emphasising building its EV leadership and diversifying the revenue streams via multiple operations. However, it has also highlighted the company’s focus on ESG (Environmental, Social, and Governance) growth by 2030. These are the 6 key pillars on which the company is betting for expansion in the Indian auto market by 2030. These pillars are backed by 4S- speed, scale, simplification, and synergy.
Hero MotoCorp is also trying to level up its business strategy through modifications on all fronts—portfolio, product, retail experience, digital and AI, R&D, and customers. In this, Hero aspires to become a leading name in the two-wheeler industry across both mass and premium market segments.
The premium 2Ws are an opportunity for more than INR 80,000 crore the company said in its presentation. Where it aims to be driven by 200cc or more than 200cc. In this, Hero aims premium value share to be higher than 35% of total 2W by FY30. While for premium volume share it targets 20%.
4S of Hero MotoCorp-
Hero MotoCorp expatiate its new strategy to expand its market via 4S as mentioned above which implies-
Speed- The company is aiming to boost its speed in decision-making, time to market, and responses to make Hero MotoCorp a responsive organisation along with digitalisation and automation.
Scale- It is betting on scalable solutions and platform approaches to scale up the operations of the company.
Simplification- A focus on cutting down the unnecessary complexities and redundancies to empower horizontal structure of organisation.
Synergy- The company eyes collaborating internally to lead the competition externally. It also aims to create a collaborative ecosystem for partners, dealers, and center of excellence.
The company is also targeting sustainability with 100% carbon-neutral operations by 2030 along with product recyclability. It also aims at 100% green dealerships by the end of the decade as it is currently at 17%. Keeping gender diversity in mind the company targets 30% diversity by 2030.
Expansion strategy
International touchpoints: The company aims international fronts with its entry in Brazil and South East Asia. Hero is going to commence its operations in Brazil from Q4 FY 2024-25 while it has already commenced its operations in the Philippines from August 1 2024.
Elevating retail experience: Hero is upgrading itself to 2.0 version via configurator, march wall, and large screens in its current stores to enhance the retail experience. It aims to increase its dealership count from 300 to 800 by FY25. In the Premium segment of Hero, it targets almost 3x its dealerships count i.e from 42 to 150 dealerships by 2025.
Collaborations: Tie-ups with multiple companies like Harley Davidson, Ather, and Zero Motorcycle will back the companies startegies and targets. In collaboration with an Amercial electric motorcycle manufacturer Zero Motorcycles, Hero will build and market former company’s EV model in India. With Ather it will boost partnerships charging points and charging technology. First 440cc by Hero MotoCorp was launched in collaboration with Harley Davidson.
The company has grown 11% Y-o-Y in revenue with INR 37,456 crore along with EBITDA margin of 14% . The PAT was recorded at INR 3,968 crore that is 36% higher Y-o-Y.
