[pranavshet]

Respected Members,

Hope you all are doing great.

Earlier Thread : Hero MotoCorp - The Way Forward - Part 1

In the year 2022, I had written an article on the future of Hero. Today I want to revisit the same by writing a completely new article. Since a long time has passed since my last article, I would request the moderators to keep this thread as completely independent from the earlier thread as I would like to use this platform to draw the attention of the top management of Hero to the areas concerning the company on multiple fronts.

Observations: Though Hero is hovering around 4.5 lakh units per month, it is bleeding market share.
At the end of March 2023, Hero had a combined share of around 33 percent. Honda had a share of around 25 odd percent. But currently, Hero is under tremendous pressure. If we discount the astronomical retail sales in November 2024 by Hero of almost 9.1 lakh units, the performance has been below satisfactory. In normal months they are struggling big time.

Even the retail sales that they have achieved were with the help of industry-leading discounts. If one observes, there is no meaningful growth in consolidated revenue. It would be prudent to consider consolidated revenue for comparison because the other peers ie Bajaj, TVS & HMSI are doing great on the exports front. It’s been 13 long years since Hero parted ways with Honda and enough time to make inroads in export markets. The exports for Hero on the other hand don’t even have an impact of 5% of the consolidated revenue despite being present in 40+ countries. There is no point in just participating in foreign markets just for the sake of it.

One has to prepare a product strategy before entering any market. All hero did was rehash the Indian products for foreign markets. Just because one became famous in India doesn’t mean one will be famous in other parts. Top of it , Hero is the last one to enter these markets.

Indian buyers are very smart. You cannot expect to introduce mediocre products in the premium segment and expect to win. Even if the products are less, one can still make an impact if it evoke the right kind of emotions in the customer’s mind. Mere participation in the segment won’t help. One has to be different and exciting to be noticed. The products should have the basic hygiene of good build & fit & finish. Hero falls miserably short on these parameters.

Members, please pardon me for this rant but I feel it is necessary to make the top-level management know the actual realities on the ground.


1. Currently the Splendor brand consists of so many variants namely: Splendor+, Splendor xtec, splendor xtec 2.0. The only differentiation between these products is connectivity features. What is the point in introducing so many variants? The company is playing the splendor card so much that sooner or later it will become a weakness. My suggestion would be to trim the variants to just 2: One entry-level splendor & the fully loaded xtec variant. There is a limit to the price differential between the two variants.


2. HF Deluxe brand consists of HF Deluxe & HF 100. Again, very minimal differentiation. Passion + which again runs on the same platform. The 113cc variant of the Passion was discontinued. It would be important for the hero to go back to the drawing board & check exactly why the 113cc variant failed despite being claimed as a better performer. So basically they reintroduced an almost 14-year-old product and marketed as “ pehla pyaar”. Ridiculous, isn’t it?

3. The above-mentioned three products still contribute around 80 to 85% of the sales. Even worse, their contribution to the total mix has increased as other products are faring badly

4. The brands like Glamour & Super Splendor have fallen off the cliff. Though Xtreme 125 has started doing good volumes, the challenge for Hero has been about sustaining the momentum. It is imperative that Hero resolves all the initial niggles on the 125r. Raider & the newly launched Pulsar N125 would not make life easy.

5. The xoom scooter initially which was doing for them has also fallen off the cliff. There are serious reliability issues with their scooter platforms. Even though the xoom 125 & xoom 160 scooters have been displayed the production timeline is not yet visible. Exactly don’t know why the products are delayed.

6. The pleasure before the redesign ie before the current ugly grab handle was doing ok. But now even that product is showing signs of fatigue.

7. The less I speak about their premium products strategy the better it is. I just want to know what the genesis is behind introducing each of their so-called premium products.

a. X440: Who on the earth would price the product so astronomically with such absurd fit & finish issues. What kind of cabling is that? Is it called a premium product? Hero must remember one thing: It might be an entry product for Harley, but it’s a premium product for them. They should have got their shit right on this. Those ugly welds and uneven finish levels between different components is just not acceptable.

I also don’t get the logic for so huge difference between the mid variant & the top variant just for some diamond cut finish & special colour. The difference of Rupees 20K. Ideally according to me the middle variant itself should have been priced at 2.3 lakhs & top variant around 2.5 lakhs. I don’t get the logic behind the person who conceived a variant with tube tyre spoke wheels at Rupees 2.4 lakhs. By doing so they priced themselves out of the game.
Triumph Bajaj's super pricing along with excellent fit & finish products only gave them a knockout punch. Hero also has been a laggard in introducing fixes for the same. They still haven’t rectified fit & finish issues for x440 & expect to attain leadership in premium. It requires a tremendous amount of dedication & focus. Hero has to listen to feedback proactively & rectify the same on a faster basis. Bajaj is excellent on that front. RE is the benchmark as far as focus & community building goes.

b. Maverick: I exactly don’t know what the exact thought process of the product development team was. It’s so confusing. It's neither a retro street naked nor a modern street naked. It's neither here nor there kind of design. Maybe the design element looks good in isolation, but it is a complete disaster when everything is put together. Again, the quality aspect of this motorcycle is also not up to the mark. The QC team of Hero seriously needs to be upgraded. They are just not up to mark. I’m not entirely convinced if the 440-cc engine was the correct engine for this motorcycle. According to me, the LC 400 platform would have been the perfect fit for its demeanor. It would have been ok if Hero had priced it higher than x440 with the above-mentioned attributes. At least it would have struck the right chord with the enthusiasts. Hero should keep in mind that motorcycles are an emotional purchase.

It must appeal heart more than the head. This product should have been the stepping stone to Hero's premium brand imagery. They should have thrown the kitchen sink at it. At least it should have been on the aspirational purchase list of some people. Not everything is dictated by numbers. Profitability is crucial but I would rather take a rise in product cost for image building rather than spending 300 crores on stupid golf events.

c. Karizma The original positioning of this brand was that of a sports tourer. It was way ahead of time when it was originally launched in the year 2003. That bike epitomized effortless cruising with refined performance. It was a pioneer of the sports tourer segment in India. That was a proper aspirational product for the time. Over the years, the then-Hero Honda & later Hero didn’t even bother to give it a significant update. All they did was nonsensical sticker updates. 2014 horrendous update almost put the brand on deathbed.

We were quite excited when it was announced that a new-gen Karizma was in the offing. But for me, the final product was a bummer. Hero tried to create an R15 rival with a relaxed riding position. It should have been ideally a sports tourer with a displacement of around 500 cc equipped with an LC engine in a slightly relaxed state of tune which could munch miles for fun. The power output could have been around 45 hp and around 40 nm of torque with peak power around 9500 rpm. The engine should have been tuned for reliability and easy serviceability. But the things didn’t transpire. So, the wait for the spiritual successor of Karizma continues. Even the build quality of XMR 210 is not up to the mark. Hero should up their game in product validation & testing. Your premium customers cannot be guinea pigs.

Also, the vendor selection criteria of the company has to be ascertained. Just because one supplier is giving a component at a cost lower than other he should not be selected. The longevity of the components has to be validated & then only the vendors have to be frozen. It appears that Hero in a bid to improve its EBITDA has fiddled with its core supplier group. The consequence of this is motorcycles with shaky reliability.


d. Xpulse: I will give credit where due. They managed to take risk and launch a motorcycle which they pioneered. Again, I will also reiterate that they were timid to launch it with a heavily reworked unicorn engine. That bike was riddled with horrendous engine problems. They tried to rectify it by bringing in 4v variant. But still even that bike suffers from engine reliability problems. I just hope the glitches on the 210 are ironed out before its launched.


e. EV Sales & the products are a big no.


Conclusion: From the above pointers I deeply sense that Hero is trying to do too many things at the same time. There is no pinpoint focus on brand building, I mean individual product brands. They are doing too many things & getting not a single new product right. They need a specialist approach. The perception of quality that we used to associate with Hero Honda is simply non-existent. Their ranking on quality parameters will be the lowest among top players & even among some smaller players. Their quality has taken a huge beating. Their priority should be to get the quality process right up there with the best. They also need to revisit their product planning & pricing strategies. They have to continue investing even more heavily in R&D as Hero is a start-up with 10 year old R&D setup & 40 years of manufacturing.


Dear members, would love to know your views on the same. Till then drive/ ride safely & Take care. Namaskara.

[Sensible_Speed]

Well written. While I may not agree with everything said here, I certainly do with all the QC concerns mentioned. Hero's direction of late has been that of a typical capitalistic enterprise, rather than an OEM. And that shows in the quality of their product. Learn from the West's mistakes while you can. Look at KTM, VW, Stellantis, Nissan - literally any big player in the European and NA markets. They're all struggling for survival after trying to procure the maximum payout for their shareholders.

[BullettuPaandi]

Good write-up! Hope it gets the attention that it deserves.

While I completely agree with the QC issue, which damn near anyone would, I feel a bit differently in the others that you've put forth.

To begin with, I think there's a distinction to be made, when it comes to how smart Indians are. Indian motorcycle buyers are not as smart as they think they are; certainly not as smart as Indian car buyers, who truly are smart(er). I'm tempted to say that, it is perhaps the more money on the line that brings the best judgement out of people. But, if you compare premium motorcycles sales with equivalent premium car sales, you'll find that this distinction still persists.

Ignore-able paras containing off-topic hypothesis under quote:

I think the reason could rather be that, it is a bit easier to judge cars than bikes. If you are looking to buy a car, you probably already have a couple of car brands in mind that make the kind of car you are looking for. Because car OEMs sort of have to specialise on a particular type of car, to be able to develop a convincing addition to the existing market, and use subsidiaries with a different specialisation to differentiate.

This results in identities such as: Mercedes- luxurious performance, BMW- sporty performance, Audi- sporty performance, but a bit more design-focused than beemers, VW- focused on simplistic fundamentals, Skoda- VW + features, Hyundai- value proposition, Kia- Hyundai + sporty/premium appeal, Mahindra- utilitarian, youth-focused, Tata- a bit of a mess, I guess(?); used to be budget-minded, but is suddenly pretentious after JLR acquisitions, when QC issues only seem to have compounded since, and in my opinion failed to realise the advantage of introducing a different name like Hyundai did with Kia.

Anyways, such identities are harder to make on Motorcycle manufacturers, as it is actually easier for Motorcycle OEMs to not specialise and introduce all flavours themselves, whether or not they actually differentiate between them. Add to this the generally less mature reviews on motorcycles (on influential platforms like YouTube that have the most sway; so not considering rather informational TBHP reviews here), buyers ultimately have to rely on test rides more than they do on cars, where little to no exposure on riding a variety of bikes leads to most motorcycle buyers being prone to 'winging it', likely after having gotten rather influenced than informed.

So, mere participation does unfortunately help OEMs, especially if they are already spoilt by buyers with (justifiable) herd mentality- looking squarely at Splendor and Activa buyers. In my opinion, as buyers we should just take manufacturers for what they are, instead of trying to make them what they aren't or what they could be. Because more often than not, they do have a pretty good reason for it, which likely was handed over to them by none other than ourselves. Honda IS not as invested in the market as we'd like- that's that, period; Hero IS into juggling multiple poor attempts than focusing on making a single good one- that's that, period. Motorcycle buyers- and to some extent car buyers as well- will have a better time 'winging it' with the used bike/car market and new-comers, resulting in both more commitment to improving existing products from established OEMs and more competition in general as well. This, I believe, is the only way we're getting anywhere. There've been many such threads, with really good comprehensive feedback for OEMs; useful as they are, nothing fruitful seems to have come out of them, unfortunately.

1. Though too many variants with dubious names sound annoying to browse, I think it has actually helped with the sales, especially given how price sensitive the category is. If the sales consultants on the showrooms are qualified enough, which in my experience they have been, I'm willing to look past this, as I don't care much about what the product is called. However, it'd be nice if they could simplify it. They seem to have all permutations and combinations of options under different name. So, at this point, they probably could add a 'custom' variant, and not really have any logistical issue.

2, 3 & 4. It is ridiculous, and is just a reflection of how spoilt they are by us. Hero didn't face as much competition from Bajaj (until Freedom) and TVS (until Radeon) in <110cc as it did in >125cc segment. I think the 'gig economy' and aggressive financing brought back some more life out of these old bikes for Hero to have their feet up, at least for now. Whether they can continue to do so, is yet to be determined, from how the sales of Radeon and Freedom prolong. Bajaj faces a bit more trouble here as it has to convince even the early adopters of the value in long run, despite the higher upfront cost.

X440-Mavrick was never going to work. Such 'stepping up to premium brand imagery' doesn't seem to work well; at least not as well as introducing under a different brand like Hyundai-Kia. Tata's has been the best effort on this so far, which still can't be termed as 'quite effective'. The Hero-Harley tie-up is more of a disaster for Harley than for Hero, as a single cylinder Harley is doomed to be frowned upon. My guess is that, Hero likely knew this very well, and just took advantage of their rather desperate client, which HD was likely well aware of as well. The tie-up is just a poor match- a 'hail Mary' from HD, and just a 'will take it' for Hero. This is in sheer contrast to Triumph-Bajaj, KTM-Bajaj & BMW-TVS, wherein both parties benefit equivalently. The design screw-up is only expected and basically a given, since it is from Hero. I mean, look at what they did to the XPulse, starting with the Impulse; they've made it unimaginably worse. These guys have a hard time defining their own design philosophy; how are they ever supposed to craft someone else's?

I think Karizma and 200S focused too much on comfort and VFM, respectively. Buyers of such bike did and do prefer how the likes of R15s felt sporty- despite the discomfort- and were and are willing to pay more for it. Hero, took VFM to only mean 'price-to-performance', but failed to both initially realise what such buyers actually consider as 'value', and adapt to it. I don't think it is particularly about the engine capacity as well- R15 both costed and sold more, despite being just a 155cc bike. There is market for low capacity sport bikes- it just shouldn't sport a dud under the fairing.

I wouldn't give as much credit to the XPulse as I would to the Impulse. Their 'dual sport' Impulse was truly a pioneer all things considered. Their suddenly 'ADV' XPulse was just them merely participating again, now that ADVs were starting to get trickled down to lower capacities, notably the Himalayan 411. Hero noticed the hype, and rushed to unveil the 2V, likely very well knowing its highway limitations, as they launched the 4V in relatively no time. The 4V is the best beginner off-road bike in my opinion, and I'm at peace with mine despite all its cons, but it is very much a 'dual sport' and nowhere near ADVs in terms of capability. You can't exactly cruise down the highway; certainly not with a pillion.

Completely agree with the suggestions you make in the conclusion; those will definitely make Hero a better 'MotoCorp'. But HMC, the whole conglomerate, seems to be not so interested in focusing. They still are active in the cycles business for some reason- I understand that it could be 'sticking to roots' or 'family history sentiments', but still looks a bit too active even for sentimental reasons, to me. I'm clueless about how they would/could go about it though, even if they decided to take these suggestions.

Hero has never entirely pulled themselves up by their bootstraps. Both in their cycles and motorcycles businesses, they attracted well-deserved help from the Govt. & partnership from Honda, respectively. They have historically been more resourceful with the opportunities they get, than with R&D expenses and QC management. The least they could've done is holding on to the QC reputation they had during the Hero-Honda days. But they are losing that as well- they seem to be neither innovative nor imperative. It'll be hard to manage both even for a focused company. Not impossible, given that RE has done it- the Himalayan to some extent and the 650Twins to a huge extent marked a definite shift in trajectory for RE, and they managed to drastically reduce QC issues as well. A bit hard for me to expect such out of Hero; but I guess only time will tell.

[sukarsan]

After reading your article, I looked up at the sales number. Nov sales for HD(387) and Maverick(34) look terrible and they pale in comparison to Bajaj Triumph(~2000). Even their electric vehicle -Vida , sales are dropping where as Chetak & iqube selling more and having an increasing trend.

Stock price seems to be reflective of what you have written. As compared to Bajaj and TVS, Hero motocorp is underperforming.

They did launch something called Hero Surge which are moonshots IMO.

[pranavshet]

Originally Posted by sukarsan

After reading your article, I looked up at the sales number. Nov sales for HD(387) and Maverick(34) look terrible and they pale in comparison to Bajaj Triumph(~2000). Even their electric vehicle -Vida , sales are dropping where as Chetak & iqube selling more and having an increasing trend.

Stock price seems to be reflective of what you have written. As compared to Bajaj and TVS, Hero motocorp is underperforming.

They did launch something called Hero Surge which are moonshots IMO.

HD 440X and Maverick are simple products. They should collectively have a minimum clocking unit of around 3000. Even RR 310, a specialized and pricier model, sells around 800 units.

Just imagine when it gets a 450cc block based on the new platform that TVS recently showcased. It will at least clock around 1500 units.

I don't know how they justify it to shareholders. They made huge big mouth projections. They are not even clocking 1/12th of the volumes projected. They had given a run rate of 3000 to 5000 units per month. Here they are even struggling to clock 500 units. Once the initial euphoria dissipated, the said products just couldn't sustain the momentum.

That only points to one problem: That the products are not up to the mark. They lack an attribute that will bring prospective customers to the showrooms.

Also, Bajaj is selling around 3000 units of Triumph only through Triumph dealerships. Hero, on the other hand, is selling it through Hero 2.0, Premia, and HD Dealerships. Hero outnumbers Bajaj at scale of at least 5:1.

Something just doesn't feel right about Hero. They have to remember one thing. In 2010 HeroHonda had a 49% market share. Today it has around 27-28%. The top management specifically should be questioned as too why they bled so much market share.

Normally companies who are leaders in their categories don't crumble like this. If they continue sitting on past laurels, sooner or later it might drop to 17%.

Market is shifting away from entry commuters. Hero , please smell the coffee before its too late.

[Faf]

From my own experience, Hero is just going downwards and downwards. With the product quality gone downhill already so is the service quality.

Owned Xpulse 4v for a brief period of time. What I can say is apart from the front suspension nothing was good in the bike. Issues like engine head oil leakage, overheating, engine shutting down suddenly while riding, rear suspension leakage, cluster display conking off issues were a plenty.

Coming to the customer service, there are already below par service quality issues mentioned all over the place. Plus, I have been chasing them for an online booking refund for a month now. Their customer care mail ids hardly respond and so does the grievance officer mail id. Their Instagram page initially responds and then asks to mail them again which defeats the purpose of reaching them on social media. And heights are when they start ignoring you and delete your comments. I still haven't received my refund. From my own experience, Bajaj service is a hundred times better than Hero.

[Mukunthan91]

I agree with the quality issues of hero motocorp bikes in the recent years. The quality of their bikes has been of a concern especially after the separation of the joint venture with Honda. The after sales niggles and after sales service needs some attention by the hero motocorp management.I had purchased Hero splendor ismart 110 cc in April 2022, but due to frequent air lock issues which had let me stranded in the middle of the road atleast 6-7 times and the bike simply refused to start. When taken to the service station there was no diagnosis and the solution offered was simply wait for 15-30 minutes and restart the bike.
I had to sell the bike and go for royal Enfield hunter 350 within 6 months of purchasing a new bike from Hero.

[Faf]

Originally Posted by Faf

Coming to the customer service, there are already below par service quality issues mentioned all over the place. Plus, I have been chasing them for an online booking refund for a month now. Their customer care mail ids hardly respond and so does the grievance officer mail id. Their Instagram page initially responds and then asks to mail them again which defeats the purpose of reaching them on social media. And heights are when they start ignoring you and delete your comments. I still haven't received my refund. From my own experience, Bajaj service is a hundred times better than Hero.

Hi Members, Off-topic- need your suggestions on how to proceed on getting my refund. This is going on since November last week. Initially they responded and cancelled the booking, with no updates whatsoever on the refund. When I asked them for the refund, that's when it all started. They used to hardly respond to one out of my four mails. In-between they took my cancelled cheque but no further concrete updates. Off late they have stopped responding, even their grievance officer or Head office mail ids never respond. They delete my social media comments too. This is the worst behavior I have seen from any OEM till date. I fail to understand how long it takes to process an online refund in this age.

[MGSP]

Way back Yr-2000 I was impressed with HERO WINNER scooter design with 14inch wheels (a light weight 2-stroke scooter https://www.bikesmedia.in/hero-moto-corp/winner.html). Without test driving or inputs of other buyers experience, I bought one through a Bangalore dealer and suffered. While design and aesthetics were above what others brands offered, the mechanicals sucked.

Due to poor build quality and unreliability, the scooter used to stop every 10-kms ride. Lack of power, frequent auto gear stalling, unstable idle rpm….can't explain in detail the experience I went through. Both dealer service personal and Hero Motor Corp team response sucked those days. After using and haggling for few months, I exchanged and moved onto another brand motorcycle.

Fast forward, recently Hero showcased Xoom 160, Xpulse 210 prototypes...sort of rekindled my interest in Hero brand after shunning for 25-yrs.**

Currently I’m looking to buy a maxi-scooter and would like to check out Xoom 160 in coming days, by undertaking extensive test drive’s and hear-out other buyers experience, before deciding on Hero brand 2wheelers. Further I fail to understand Hero's hesitation in market launch, after creating product buzz. It's over an year Xoom 160 showcased and launch delayed?

I understand launching any product is related to company’s business strategy, which is dependent on the 'need of the consumer, market size, product & portfolio range, etc'. But Hero is very slow when it comes to Market launch of new products.

It's right time for Hero to quickly learn form '1st mover Aerox 155, Yamaha experience' and to position Xoom 160 appropriately (becoming 2nd mover) to consolidate pent-up demand, before other competitors (Honda & TVS) enter into market and spoil the segment.

Lastly Hero need to up the Quality game backed with reliable service personal.

[pranavshet]

Originally Posted by Mukunthan91

I agree with the quality issues of hero motocorp bikes in the recent years. The quality of their bikes has been of a concern especially after the separation of the joint venture with Honda. The after sales niggles and after-sales service needs some attention by the hero motocorp management.I had purchased Hero splendor ismart 110 cc in April 2022, but due to frequent air lock issues which had let me stranded in the middle of the road atleast 6-7 times and the bike simply refused to start. When taken to the service station there was no diagnosis and the solution offered was simply wait for 15-30 minutes and restart the bike.
I had to sell the bike and go for Royal Enfield hunter 350 within 6 months of purchasing a new bike from Hero.

Off late I have seen one more trend.
Either the person who is having a Hero Dealership is leaving the company or the new person who has bought the Hero Dealership leaves it within 1-2 years.
I have observed this trend in multiple places. In the state that I stay Hero has one of the worst dealerships. They are not doing sales-wise. One big dealer based out in Margao shut down their dealership. That dealer was in existence in the early 1990s. This only denotes how dealers/ prospective dealers see Hero as a Brand.
The replacement for that was a small sales outlet in Margao. Downright pathetic. I guess the person who is investing in the dealership is not content only in selling low margin commuter motorcycles.
I stay in a place called Ponda in goa. It is a taluka. Honda, TVS & Bajaj all have proper big dealerships but Hero has only Authorised sales point. The Service center situation: the less I rant about it the better it is. It is equivalent to roadside mechanic shop. Disgusting to say the list.

The reason why Hero is losing its old dealerships is something a lot of have to question. It appears that Dealers are getting squeezed because of too much of inventory being pushed down their throat & adverse financing costs for financing the same is not turning out to be profitable.

This is not the only instance. In uttar kannada district of Karnataka there is a taluka called Ankola. Its around 35 kms from Karwar & around 110 kms from Goa. That’s my native place.

Just 2 years back a new medium sized hero dealership had opened there. I had visited that place this year (For my Kuldevi) Shree Aryadurga Devi. I was shocked to see that the Dealership has been stopped. It only denotes only one thing: There is huge amount of product fatigue in Hero’s Line up. People are wanting something new. If this is happening in their stronghold ie Tier 2 & Tier 3 towns, What can we expect in Tier I town.

Dear Members,
Would love to know your thoughts on the same. Till then ride & drive safely.