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Focus on filling the product gaps in the premium segment

We visited Hero MotoCorp (HMCL)’s Global Centre of Innovation and Technology (CIT) in Jaipur, where the company showcased its product line-ups and concepts in the premium motorcycle segment, scooters, and electric vehicles (EVs). During its product launch event in Jaipur, HMCL launched two new motorcycles: i) Xtreme 125R, to strengthen its position in the growing 125CC segment, and ii) Mavrick 440, a modern Roadster built on the same platform as the Harley Davidson 440X. We believe both of these launches are in line with HMCL's strategy to expand its presence in the premium 2W segment. The company is expected to prioritize filling product gaps and expanding channels in the premium category in the coming years. This, along with a healthy demand recovery in key motorcycling states, should bode well for the overall growth of HMCL.

Xtreme 125R: To strengthen HMCL’s presence in the growing 125CC segment

* HMCL launched its newest offering, ‘Xtreme 125R’, in the competitive executive 125CC segment in two variants – IBS (priced at INR95k) and single channel ABS (priced at INR99.5k). It is also available in three colors - Blue, Red and Black.

* This motorcycle houses an all-new 125CC SPRINT engine with EBT (engine balancer technology). Despite a higher power output of 11.4bhp, the mileage claimed by the company is 66kmpl. In terms of safety, it is equipped with the first-in-segment single-channel ABS.

* This is the third offering by HMCL in this category, including Splendor and Glamour. The motorcycle has a sportier look vis-à-vis its other variants and it would be targeting the younger audience.

* About the 125CC segment: The monthly sales run rate of the industry in 125CC segment is 270-275k units (has contributed 18% of the overall volumes in FY24YTD vs. 12% in FY19), with HMCL's current market share at 19%. It would be available in showrooms from 20th Feb, while the production has already started.

Mavrick: The first Hero-badged product in >400CC category

* The company launched Mavrick 440, which is its first own-badged product in the premium segment of >400CC. This premium motorcycle is co-developed with Harley Davidson and is based on the X440 Roadster. Bookings would commence in Feb’24, with deliveries likely to start in Apr’24.

* The Mavrick 440 will come in three variants and will be available in five color options. The basic model will come in a single Arctic White paint job and will be available with spoke wheels. The mid-range model will come with alloy wheels and be offered in Celestial Blue and Fearless Red. The highest-spec trim level will 24 January 2024 Flash | Sector: Automobile Hero Motocorp 24 January 2024 31 come with machined alloy wheels and be offered in Phantom Black and Enigma Black color choices.

* This motorcycle is fitted with an Air cooler and oil cooler 2V single-cylinder 440CC ‘TorqX’ engine with electronic fuel injection. It has an upright riding position, a spacious seat, ample legroom, and optimized grab rails, thus making the journey comfortable for both rider and passenger.

* About the >350CC segment: The monthly sales run rate for the 350CC and above segment is 78-80k units, with HMCL's (through HD) market share at <1%.

Mainstream and mass-market products in EVs

* The company would be launching e-scooters in all the segments (premium, mainstream, and mass market) by 1HFY25. These would be followed by a costeffective refresh by 2HFY25.

* The company would further focus on B2B, global, and market-specific scooters going forward.

* It would also be planning to launch Vida motorcycles, focusing on the premium segment. These products would cater to the high- and mid-performance categories, in collaboration with Zero motorcycles. These motorcycles would be on a single-base platform. For this, HMCL has completed USD60m of investments in Mar’23.

Distribution and digital initiatives

* It plans to launch 100 Hero Premia stores by Jun’24E (vs. three stores at present). It would also be launching Premia Service, which would be operational in three locations in Jan’24. The service experience would largely be digital for customers.

* Further, it has set a target to launch 400 Hero 2.0 stores by end of 4QFY24 (vs. 300 stores at present).

* It is focusing on the digital initiatives and AI for the whole pre-booking to delivery process of the vehicles. About 54% of the bookings of HD X440 were online with four bookings per minute during the peak period.

* It has launched industry-first features like ONDC on App. It has also launched retail finance platform e-Fin, which is currently in the testing phase in NCR. 500 applications are already sanctioned, with an average sanction time of 4.2 minutes.

* FY24 digital enquiries stand around 16.6% (vs. 7.7% in FY23) and the conversion rate in FY24 is at 12.4%.

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