[GTO]

I don't remember the last time a manufacturer shared a press release directly referencing its competitor. Clearly, there's no love lost between these two . Is Hero getting rankled by Honda? Or is it just setting the record straight? One-upmanship?

Sharing press release below:

Hero MotoCorp gains market share to expand the gap with Honda

Contrary to popular perception of Honda Motorcycles and Scooters India (HMSI) closing the gap with Hero, the home-grown two-wheeler giant has now increased its lead over its Japanese former partner to more than 2.15 lakh units in the first two months of this fiscal (Apr-May’ 18). This is a significant jump over the same period in the previous fiscal when its lead was only 1.36 lakhs.

With the steadily expanding gap, Hero is now regaining the market share, which it had lost to competition over the past few years.



At the end of May, Hero MotoCorp’s overall market share in the domestic two-wheeler market stood at 37.4% - a gain of more than ​1​% over the same period last year, when its market share stood at 36​.2% in May 2017. In the domestic motorcycle market, however, Hero continues to command over 50% market share.

In the month of May, Hero MotoCorp sold 706,365 units of motorcycles and scooters in – a growth of 11% over the corresponding month in the previous fiscal (May 2017) when the Company had sold 6,33,884 units. This was the third month of seven lakh-plus sales by Hero MotoCorp in recent times, with the two previous months being March 2018 (730,473) and September 2017 (720,739).

“With the forecast of a good monsoon this year, there is expectation of an uptick in market demand in the later part of the year, leading to a sustained momentum in the positive turnaround in sentiments across the country. We are well placed to leverage that with the upcoming introduction of its new motorcycles and scooters during the year,” a Hero MotoCorp official told PTI.

A normal monsoon bodes well for Hero as half of its sales comes from the rural market. Hero has also lined up a slew of new premium motorcycles and scooters for launch in the coming months, as it goes for market share gain in these fast-growing segments.

Hero will soon mark its entry into the lucrative 200cc premium segment with the introduction of the new Xtreme 200R and XPulse motorcycles in the coming months. The market leader, which has maintained its pole position in the domestic market since separating from its erstwhile partner Honda more than seven years back, will also soon launch the new Duet 125 and Maestro Edge 125 scooters – its first foray into the 125cc scooter segment.

Hero has been on a record-breaking spree in its sales performance since the festive season last year. The Company registered its highest ever-fiscal sales in FY ’18, clocking 7.59 million units, ending the year with a gap of over 1.5 million sales over HMSI.

In the festive period last year, Hero sold over two million units of motorcycles and scooters, including over three lakh vehicles on a single day on Dhanteras. It also became the first company in the world to sell over two million units of two-wheelers in a single quarter, which it achieved in the July to September period.

Hero is also rapidly adding capacities to prepare itself for future demand. The Company commenced construction of its new manufacturing facility in Chitoor in Andhra Pradesh, which will be Hero’s sixth plant in the country. Hero currently has an installed capacity of 9.2 million units per annum and the Chitoor plant - when fully operational - will take its installed capacity to over 11 million units per annum in the next two years’ time.

[Sheel]

The gap will be there as long as people will queue up to buy the Splendors/Passion and Glamour [what names]. Add to the fact that ASC experience of Honda is nothing to write home about.

Though I do see Hero Motors running their ASC's in cow like sheds, I wrote to them as well but to no avail.

We thankfully have other [more able] Japanese to cater to needs.

[SmartCat]

Even if you are rankled by competition, you don't show it publicly like this. You definitely don't pick and choose data points (April/May 2017 Vs April/May 2018) that show you in good light. How about starting from 2010, when Hero and Honda split up?

Colgate and Dabur are sweating because of Patanjali's rise, but on TV, the top executives of Colgate/Dabur say -

- Competition is good for customers, and in the long run, for companies
- New options for customers expand the market

They will NOT put something like this in a press release - "between 20th April 2018 and 30th May 2018, we regained market share from Patanjali".

[payeng]

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[GTO]

Originally Posted by smartcat

Colgate and Dabur are sweating because of Patanjali's rise, but on TV, the top executives of Colgate/Dabur say -

- Competition is good for customers, and in the long run, for companies
- New options for customers expand the market

They will NOT put something like this in a press release - "between 20th April 2018 and 30th May 2018, we regained market share from Patanjali".

That's exactly my point. It's not classy at all. Heck, forget classy, this behaviour isn't befitting the market leader who is supposed to set an example for the others. It looks so immature.

Even if Hero wanted to get the point across, it could have simply sent a press release with its very impressive sales numbers & saying "we have extended our lead over the competition".

I just thought of another reason Hero would've sent this press release out = to boost its share price.

[libranof1987]

Fairly juvenile, isn't it.

If Hero does want to highlight its position, it is this post that they need to talk about. The entire picture.

http://www.team-bhp.com/forum/motorb...ml#post4406628

While I do believe Hero has a massive advantage in its cash cow (Splendor) in the immediate future, it won't last forever. The problem is, there seems to be little Hero is doing to go forward. One disruption (a good product or change in market dynamics) and Hero's party will be over rather abruptly.

[SmartCat]

Originally Posted by GTO

I just thought of another reason Hero would've sent this press release out = to boost its share price.

Yeah - these days business TV anchors, analysts and company executives talk a lot about market share and margins. But these are important only for stagnating sectors like Telecom. That is, if Jio is taking market share from Idea, it is really a big deal. But in a sector like Two wheelers, which is growing at 15% per annum, it really does not matter much if Hero lost market share to Honda.

Evidence:

Hero's market share has fallen from 50% plus to 37% in 7 years since the split. But during that period, revenues of Hero Motocorp have doubled. And so did the profits. That's because the entire sector is growing

Originally Posted by libranof1987

While I do believe Hero has a massive advantage in its cash cow (Splendor) in the immediate future, it won't last forever. The problem is, there seems to be little Hero is doing to go forward. One disruption (a good product or change in market dynamics) and Hero's party will be over rather abruptly.

True, but Hero won't go the Hindustan Motors way. They are innovating, updating old products and launching new products. They are riding on Honda's success in scooters and now have 3 products that bring in decent volumes. As long as Hero Motocorp is nimble, they will do well.

Remember Asther electric scooter?
http://www.team-bhp.com/forum/motorb...ml#post4412160

Guess who is top shareholder of the startup!
https://auto.ndtv.com/news/hero-moto...energy-1520809

[OrangeCar]

Originally Posted by GTO

I just thought of another reason Hero would've sent this press release out = to boost its share price.

I thought of it too.. But then, to influence share price in such trivial fashion would probably just result in an intra-day spike, that too if only the note gathers attention.

Originally Posted by smartcat

Hero's market share has fallen from 50% plus to 37% in 7 years since the split. But during that period, revenues of Hero Motocorp have doubled. And so did the profits. That's because the entire sector is growing

Expecting such in depth analysis to come out from a TV studio.. I firmly believe those days are gone. TV anchors / reports these days have so many things to take care - pissing off potential ad space buyers / taking on big sharks who might completely buy you out / too many things to cover - so just speak a little bit about it, etc etc.

My take is very simple - this probably was released by Hero with inadequate scrutiny.

There usually is a mechanism through which somebody drafts a release, somebody reviews and a couple of higher ups approve it (especially, given its Japanese hierarchical overbearing!).

Something amiss here. Some reviewer or approving individual's oversight has slipped through.

Worse part.. the arrow is now shot! Cannot be taken back. I'd think Honda will show some class and not respond back. At least not via a boring press release!

[i74js]

One thing is absolutely clear, in the present situation, Hero is only afraid of Honda ! and the press release confirms it.

Honda is growing under the hands of capable management and is riding on introduction of technology, whereas Hero is still managing the show on the basis of refreshed products and the old goodwill.

In medium to long run, Indian market is bound to tilt towards Honda as it has the capability to disrupt the market with its technological advantage. Also their understanding of Indian market is no less than Hero Motocop.

The press release reflects badly on Hero.

[GTO]

I guess they got the intended result. Just see the news:

Originally Posted by OrangeCar

I thought of it too.. But then, to influence share price in such trivial fashion would probably just result in an intra-day spike, that too if only the note gathers attention.

Well said

My take is very simple - this probably was released by Hero with inadequate scrutiny.

I think you hit the nail on its head. Just got an email saying they would "like to recall the press release". Too late...now the world has published their own version of it.

[SmartCat]

Originally Posted by OrangeCar

My take is very simple - this probably was released by Hero with inadequate scrutiny. Something amiss here. Some reviewer or approving individual's oversight has slipped through.

Yeah, the Munjals are definitely not that petty.

Originally Posted by GTO

I guess they got the intended result. Just see the news: Too late...now the world has published their own version of it.

Cartoq's headline is the best!

[rrsteer]

Wonder whats at Play here.

In April 2018 MoM, Honda's sales increased by almost 50%!
For the same period, Hero's sales fell by about 3.5%

In May 2018 MoM, Honda's sales have decreased by about 18%
For the same period, Hero's sales have increased by about 2%

On the whole I have seen that Hero's sales are more consistent than Honda's.

Probably the press release was to counter the dealer dispatches that Honda did last month, which to me seemed more like a company push (at the start of a financial year) rather than market demand.

PS: It also seems Honda did this the last year too. Spurt in sales in the first month of the financial year and then it drops.

[kumarshah]

Originally Posted by libranof1987

Fairly juvenile, isn't it.

If Hero does want to highlight its position, it is this post that they need to talk about. The entire picture.

http://www.team-bhp.com/forum/motorb...ml#post4406628

While I do believe Hero has a massive advantage in its cash cow (Splendor) in the immediate future, it won't last forever. The problem is, there seems to be little Hero is doing to go forward. One disruption (a good product or change in market dynamics) and Hero's party will be over rather abruptly.

Isn't the same true for Honda? Where would Honda be without Activa?

May 2018 was first time after January 2017 that scooter sales declined:
https://www.livemint.com/Industry/P4...uary-2017.html

[Gansan]

Has HMSIL given away the engines of all the successful bikes of Hero -Splendor, Passion etc - as a parting gift at the time of the divorce, or is Hero still paying royalty on them? I wonder what will happen if HMSIL pulls the plug on the engine rights?

No other model with a Hero sourced engine has succeeded as far as I know.

[navpreet318]

The Hero developed 125cc engines are now the most powerful 125cc engines in the country. And the bikes are selling pretty good. to the level that the new vertical engines are now outpacing the horizontal engines. Both of these are available as a choice to the customers.

The 110cc engines in the new passions are selling very well in a number of markets. The Passion Xpro is a particularly hit motorcycle.
The home developed scooters are now finding very good acceptance. We are now awaiting the 125cc engined scooters which were showcased in the Auto-Expo this year.

The 200cc Xtreme 200 is already very well accepted by the media in their test ride.

See a company which has its own R&D developed but a few years back will take time to develop a full scale system of developing engines. Now that they are slowing getting into the flow, they will get better.

As of now there is no royalty being paid to anyone. The engines are all self developed. The i3s technology is patented and has very high acceptance and volume in the country.