Two-wheeler makers ride high on record sales of branded spare parts
Two-wheeler makers Royal Enfield, Bajaj Auto and Hero MotoCorp posted record revenue from sales of branded, genuine parts — like brake pads, headlights and speedometer — accessories and merchandise in FY24.
At their post-earnings investor calls, company executives attributed this to the market for such items becoming more organised and buyers giving preference to branded spares over non-branded ones. Additionally, a superior product mix — higher contribution of premium models in the sales mix and an expansion in the product portfolio in the aftermarket segment — also helped companies boost revenue and profitability, they said.
At Hero MotoCorp, revenue from spare parts and accessories increased nearly 80% in five years to a record Rs 5,087 crore in FY24 from Rs 2,836 crore in FY19. The share of this sub-segment in the company's revenue rose to 13.6% from 8.7% in this period, show its filings. Encouraged by the growth potential, the maker of the Xpulse and Splendor motorcycles will be expanding its Global Parts Centre.
«Our parts, accessories, merchandise (PAM) business continues to grow. It grew double digits in the last three to four years; we've doubled the whole revenue size of the PAM business,» Hero MotoCorp chief executive Niranjan Kumar Gupta said on an investor call last week. There is scope in even expanding this, which is what the teams are working on, he added.
The addition of premium motorcycles in the company's line-up will increase the scope of business from merchandise and premium parts, he added.
