Hero MotoCorp (NSE:HEROMOTOCO) is the dominant market leader in India – the world’s largest two-wheeler market – with over 50% share in the domestic motorcycle market.1

With innovation at the core of its philosophy, the New Delhi (India) headquartered Hero MotoCorp has been at the forefront of designing and developing technologically advanced motorcycles and scooters for customers around the world. It became the world’s largest two-wheeler manufacturer in 2001, in terms of unit volume sales in a calendar year, and has maintained the coveted title for the past 18 consecutive years.

With over 90 million satisfied customers across the globe, it continues to champion socio-economic progress and empowerment through its range of products and services.

Led by Dr Pawan Munjal, Chairman, Hero MotoCorp, it has taken rapid strides to expand its presence to 37 countries across Asia, Africa, and South & Central America. Hero MotoCorp is a truly global enterprise with a workforce that comprises of people from different nationalities including India, Bangladesh, Colombia, Germany, Austria, Japan, and France.

Manufacturing Facilities

Hero MotoCorp’s manufacturing facilities are based on the core principle of sustainable development, as the Company remains committed to maintaining the highest ecological standards.

Hero MotoCorp has seven globally benchmarked manufacturing facilities, including five in India and one each in Colombia and Bangladesh.

In India, the facilities are located at Dharuhera and Gurugram in the northern Indian state of Haryana; at Haridwar in the hill state of Uttarakhand; at Neemrana in the northern state of Rajasthan, and at Halol in the coastal state of Gujarat in western India. The facility in Colombia is located at Villa Rica in Cauca province and at Jessore in Bangladesh, situated in the southwestern region of the country.

It became the only Indian two-wheeler company to set up a manufacturing base in Latin America when it started operations at its manufacturing facility at Colombia in 2016.

Hero MotoCorp currently has an annual combined production capacity of around 9 million units of two-wheelers.

The Company’s manufacturing facilities at Neemrana and Halol have been aptly called the ‘Garden Factories’, for their various measures, which have redefined green manufacturing.

The new manufacturing facility of Hero MotoCorp is coming up at Chittoor, in the southern Indian state of Andhra Pradesh.

Research and Development

The state-of-the-art, world-class Center of Innovation and Technology (CIT) at Jaipur, in the northern Indian state of Rajasthan, is the global hub of Hero’s Research and Development.

The CIT has more than 700 engineers from across the world that are engaged in developing the new range of mobility solutions for customers across the globe. The sprawling one-of-its-kind, world-class R&D Center houses the best global facilities for product design & development, testing, and validation under one-roof.

With an objective of building a robust R&D ecosystem that is spread across global geographies, Hero MotoCorp has also set-up the ‘Hero Tech Center Germany GmbH’ at Stephanskirchen, near Munich. A wholly owned subsidiary of Hero MotoCorp, the Hero Tech Center in Germany focuses on the development of new vehicle concepts and future technologies in close cooperation with the teams at CIT in Jaipur.

As part of its technology ecosystem, Hero MotoCorp also engages with top global design and technology houses from across the world, including Italy, Spain, and Thailand.

In keeping with the diverse demography of customers in different geographies of the world, the Company is developing market-specific products to suit every customer need.

Product portfolio

The company has wide range of two wheelers.2

  • Xtreme 160R BS6
  • Xpulse 200 BS6
  • Passion Pro BS6
  • Splendor iSmart BS6
  • Glamour BS6
  • Splendor+ BS6
  • HF Deluxe BS6
  • Super Splendor BS6
  • Destini 125 BS6
  • Maestro Edge 125 BS6
  • Pleasure+ BS6
  • Xpulse 200T
  • Xtreme 200S

Business Overview

FY 2018-19 was a roller-coaster year for the two-wheeler industry. After a healthy first half, the second half turned into a rough ride on account of insurance price increase, liquidity crunch and agriculture sector slowdown. Overall, the two-wheeler industry grew by a moderate 5% compared to the previous year (FY 2017-18). The two-wheeler industry volumes for full year were 21.17 million units. During the year, ABS/CBS compliance was implemented with effect from April 1, 2019 and compliant variants were launched through the second half of the fiscal year.3

Motorcycles, which contribute to64% of the two-wheeler industry, grew by 8% with volumes of 13.59 million units. In the segments within motorcycles, following trends were seen in FY2018-19.

The contribution of scooters to the overall industry volumes declined from 33.2% to 31.6%during the year. The segment growth remained flat due to multiple reasons including an increase in overall cost of ownership and low growth in urban India. 100-110ccscooter segment declined by 9% in FY 2018- 19, while 125cc segment grew by 57%. The scooter segment volumes stood at 6.70 million units.

Mopeds contributed 4% to the two-wheeler industry. The moped segment volumes stood at 0.88million units, a marginal growth of 2% over the previous year.

Hero MotoCorp Ltd. recorded its highest ever annual domestic sales of 7.61 million units during the fiscal year 2018-19, which is 2 million units more than the nearest competitor. The Company registered this growth through a strategic approach, continuous focus on lead management, digitization and customer engagement activities, while weathering the challenges of insurance price increases and liquidity crunch in the second half of the year.

Brand Milestones

  • Splendor continued to be the Number 1 motorcycle brand made in India and entered the exclusive 3 million units-in-a-year club
  • HF Deluxe crossed 2 million units-in-a-year milestone
  • Destini 125 became the fastest growing 125cc scooter giving it ~20% market share in the aforementioned segment

Hero MotoCorp’s Performance by Sub-segments:

  • Entry Segment: Hero MotoCorp’s volume grew by 15% over the previous year. The market share in this segment stood at56.4%
  • Deluxe 100cc Segment: Hero MotoCorp’s volume grew by 8% over the previous year. The market share in this segment stands at a solid 80.8%, a gain of another 2.7%over the previous year
  • Deluxe 125cc Segment: The market share in this segment is at 56.2%, which is similar to the previous year despite a decline of 6% in volumes
  • Premium (150cc+) Segment: The market share in this segment stood at 1.4%, a loss of 1.1%over the previous year. With the launch of new models in this segment, the Company expects to drive market share recovery in FY2019-20
  • Scooter Segment: The market share in this segment stood at 10.7%. With the launch of two new scooters, Maestro Edge 125 and the new Pleasure, the Company is focussed on gaining market share in this segment.

Key Business Drivers

Consumer Experience: Customer experience is not only the lead indicator of measuring customer loyalty, identifying unhappy customers, reducing churn and increasing revenue; it is also a key point of differentiation that helps attract new customers in competitive business environments. Hence, it is critical to measure and manage customer experience on regular basis.

Hero Happiness Score, a unique initiative to drive and measure in-store consumer experience, increased significantly with the help of various customer-oriented process enhancements at dealerships.

Some of these initiatives include service camps, pick up and drop facilities in select markets, automation at workshops to create a seamless and better experience for the customers.

Expansion of Distribution Network and Institutional Sales: Growth in two-wheeler market propelled the organization to expand its network. Institutional Sales is a focus area for Hero MotoCorp and the Company has sold 1.43million units in this category. Also, focussed on large corporates and logistics, delivery service businesses.

Global business

Expansion of Distribution Network and Institutional Sales: Growth in two-wheeler market propelled the organization to expand its network. Institutional Sales is a focus area for Hero MotoCorp and the Company has sold 1.43million units in this category. Also, focussed on large corporates and logistics, delivery service businesses.

South Asia

Hero MotoCorp has presence in key South Asian markets including Bangladesh, Nepal and Sri Lanka. In all countries, the market is moving towards premium motorcycle segment, with34%in Bangladesh, 39% in Nepal and 17% in Sri Lanka. Increasing popularity of scooters is another trend in these regions with 34% in Nepal and 65% in Sri Lanka, with market slowly shifting to stylish 125cc scooters.

Hero MotoCorp crossed 100,000unit volumes in retail sales in Bangladesh for the first time in FY2018-19 registering a growth of 38%. Overall growth in the Asian region was 12%.

To further increase brand equity and showcase its product and technology capabilities, the Company participated in Auto Shows across countries in the region (Kathmandu, Colombo and Dhaka). In the Dhaka Auto Show in Bangladesh, three new products were displayed: Passion XPRO, iSmart 110+ and Maestro Edge. A unique retail financing scheme ‘Aamar Hero’ that was launched nationally in Bangladesh in a phased manner has been showing very promising results.


Currency and crude oil prices stabilized in Nigeria which led to the recovery of demand with industry growth of 60% for the two-wheeler industry. Hero MotoCorp continued its network expansion and developed new value proposition for customers, which should help in good stead in FY2019-20. The Company also re-energized core east African markets of Uganda and Tanzania with strong and committed distributor partners.

Middle East

In Turkey, the industry dropped by ~28% due to currency depreciation and economic recession. Hero MotoCorp launched Euro-IV compliant products in the market, which have been received well by customers.

Latin America:

The Latin America region grew 38% in terms of Company dispatches in FY2018-19. Countries such as Colombia, Bolivia and Ecuador showed growth in excess of 100%, while the CAC cluster (Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua)declined by 29%.

Financial highlights

On Feb 06, 2020 the company reported 14.47 per cent year-on-year (YoY) rise in standalone net profit at Rs 880.41 crore for the quarter ended December 31. The two-wheeler major had posted a profit of Rs 769.10 crore in the same period last year.4

Total income, however, declined by 10.84 per cent to Rs 7178.94 crore. The company sold 15,40,876 vehicles during the quarter against 17,98,905 in the corresponding quarter last year.

The company announced a dividend of Rs 65 per share on face value of Rs 2 each.

Niranjan Gupta, Chief Financial Officer (CFO), Hero MotoCorp, said, “The two-wheeler industry continues to face challenges amid an overall economic slowdown. Early indicators, such as a positive Rabi crop, augur well for the rural economy, which in turn is likely to help the industry.”

He added that the slew of measures announced by the finance minister as part of Budget would also go a long way in reviving the economy. However, it will take some time for the two-wheeler industry to see a sustained recovery. Hero MotoCorp expects to see a positive turnaround in the second half of next financial year.

During the third quarter, Hero MotoCorp launched India’s first BS-VI motorcycle, the Splendor iSmart and then followed it with the first BS-VI motorcycle in the entry segment - HF-Deluxe.

“The company is geared-up to transition its entire product range to the new emission norms well before the regulatory deadline and plans to stop all BS IV production by mid-February,” Hero MotoCorp said in a release.

Recent Developments

On May 4 2020,  Hero MotoCorp, the world’s largest manufacturer of motorcycles and scooters, is rapidly gearing up to commence operations, as per the guidelines stipulated by the Ministry of Home Affairs of the Government of India.5

Hero MotoCorp proactively halted operations across its manufacturing facilities and made

WFH mandatory for all its offices from March 22, 2020.

On May 11 2020, Around 10,000 units of motorcycles and scooters have already been sold since the reopening of these customer touch-points, Hero MotoCorp said in a statement. In April, there were no vehicles manufactured and dispatched to dealers. The company reported zero sales across domestic and overseas markets.6


  1. ^ https://www.heromotocorp.com/en-in/about-us.php
  2. ^ https://www.heromotocorp.com/en-in/the-bike/two-wheeler-motorcycles.html
  3. ^ https://www.heromotocorp.com/en-in/uploads/Annual_Reports/pdf/20190715054601pdf266.pdf
  4. ^ https://economictimes.indiatimes.com/markets/stocks/earnings/hero-motocorp-q3-results-profit-rises-14-to-rs-880-crore-firm-announces-rs-65-dividend/articleshow/73985665.cms?from=mdr
  5. ^ https://www.heromotocorp.com/en-in/uploads/media/pressrelease_pdf/20200504063245-pdf-304.pdf
  6. ^ https://www.business-standard.com/article/markets/hero-motocorp-gains-6-after-claims-10-000-sales-in-a-week-120051100301_1.html
Created by Asif Farooqui on 2020/06/01 07:23
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