Hero Moto expects rural demand jump
NEW DELHI : Hero MotoCorp Ltd is banking on growing demand for its entry level motorcycles in the 100cc and 110cc segments, as it looks to “nurture" green shoots in rural demand that began emerging in the fourth quarter of last year. Rural demand contributes to 55% of the total two-wheeler sector’s sales in India. In its annual report, Hero MotoCorp, the world’s largest two-wheeler maker and the largest seller of entry-level motorcycles in India, said it is keeping its price actions in the cost-sensitive segment subdued to aid higher demand, and get ahead of competition to expand its share of this market.
It is also targeting production of over 6.5 million units in FY24 for domestic and export markets, up 20% over last year’s total sales of 5.4 million units. “During the year, rural incomes have been dampened by inflationary pressures, unseasonal rains and higher commodity prices. Further, the new emission regulations have made entry-level and commuter vehicles more expensive.
This has subdued rural sales. However, the last quarter of FY2022-23 has seen demand reviving and these green shoots of change hold out hope and expectations of strong demand growth in the next fiscal", the company said. “Rural demand has also started to accelerate, with entry-level or commute-friendly bikes under 110cc gaining favour", the annual report noted.
Demand for motorcycles and scooters in India is led by rural and semi-urban markets, regions that experienced challenging circumstances during the year. However, structural growth drivers remain intact, Pawan Munjal, chairman, Hero MotoCorp said. “During FY 2022-23, we sold 5.4 million units of motorcycles and scooters, an increase from approximately 4.9 million in FY 2021-22", Munjal said.
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