Hero MotoCorp to launch four 200-300cc bikes over the next 18 months

Mumbai: Hero MotoCorp Ltd is set to introduce four motorcycles with 200-300cc engine capacity over the next 18 months and sell them through new premium dealerships in a strategy to diversify from its image as a mass-market brand, said three people with direct knowledge of the matter. India’s largest two-wheeler maker will also retail a new range of merchandise and accessories through these outlets, the people said on condition of anonymity.

The maker of the Splendor and Passion motorcycles has meanwhile hired Virat Kohli, India’s cricket team captain, as its new brand ambassador, they said, adding a brand name to promote the new sales network and merchandise will be announced in due course.

“Hero currently wants to focus on the 200-250cc segment and then gradually scale up towards the 300cc space,” said the first person cited above.

Of the four, Hero has already showcased the Xtreme 200R and XPulse motorcycles. Retail sales of the Xtreme 200R will commence next week with new brand ambassador Kohli in tow.

A company spokesperson declined to comment.

Sales of motorcycles with engine displacements of 200cc and above have grown at a fast clip largely due to the popularity of Royal Enfield motorcycles and rising disposable incomes among the country’s large middle-class households. Sales in the segment grew nearly five-fold from 220,000 motorcycles in 2011-12, to 1.02 million in 2017-18. In the same period, sales of 110cc-125cc motorcycles, or the so-called commuter segment, rose to 2.19 million from 1.57 million.

Hero MotoCorp, controlled by New Delhi-based Munjal family, dominates the vast market for entry-level motorcycles, but sales in this segment have been sluggish in the past six years, hurting its market share. The company accounted for 36.56% of the domestic two-wheeler market as of 31 March, falling from 45% in 2011-12. In the same period, Honda’s share of the market has grown from 14.9% to 29% though the Japanese company taps a sizeable scooter portfolio for its sales.

“A high-decibel, multimedia campaign will be rolled out featuring Virat Kohli and the Xtreme 200R over the next few days,” said a second person, responsible for Hero’s advertising campaigns.

Kohli’s appointment signifies Hero MotoCorp abolishing its five-year-old stance where it started to shift from cricket and related activities for sponsorship and branding to focus on sports such as hockey, shooting and athletics.

Hero previously had eight brand ambassadors from cricket. Now, it only boasts of golfer Tiger Woods, and current coach of Atletico Madrid and former Argentine footballer, Diego Simeone.

Hero is still debating whether it would own the new outlets or follow the franchise model, said a third person cited above.

“It could be a mix of dealer-owned and company-owned outlets. The plan is to start with a limited number of outlets in select metros and then gradually expand to other cities,” the person said.

The showrooms will also sell jackets, helmets, leather bags, shoes, denims, wallets, chinos, T-shirts, sun glasses and riding gear, the person said, adding some of the accessories will be showcased at the upcoming two-wheeler expo EICMA at Milan in Italy.