Hero MotoCorp bets on Harley partnership, record product launches to strengthen premium segment

The country’s largest two-wheeler maker Hero MotoCorp on Monday said it is betting big on partnership with iconic American brand Harley-Davidson and record product launches on its own to scale up its presence in the premium segment. The partners, which introduced their first co-developed model X 440 here on Monday, noted that the collaboration would also enable Harley to enter affordable segments, allowing more people to buy the iconic brand in the country.

The price of the Harley-Davidson X 440, being manufactured by Hero MotoCorp’s Neemrana plant, starts at Rs 2.29 lakh and goes up to 2.69 lakh (ex-showroom).

In an interaction with PTI, Hero MotoCorp Executive Chairman Pawan Munjal said the company is in the process of introducing a record number of new products in the premium segment (150cc-450cc) over the next two years to get to its “rightful place” in the vertical.

He acknowledged that currently, the two-wheeler major has a very small market share in the premium segment, currently, dominated by Royal Enfield.

“Harley plays a very important role for us in this entire premium strategy. While we have put out some products there, which are very successful, with Harley, there is clearly a large amount of learning for us in the development of large-sized engines,” Munjal noted.

In October 2020, Hero MotoCorp and Harley-Davidson announced a partnership for the Indian market. The deal envisaged Hero MotoCorp developing and selling a range of premium motorcycles under the Harley-Davidson brand name in the country. It is also entrusted to take care of service and parts requirements for Harley bikes.

Hero MotoCorp also has the mandate to sell Harley accessories and general merchandise, riding gear and apparel through a network of brand-exclusive Harley-Davidson dealers and its existing sales network in the country.

When asked about the future roadmap of the collaboration with Harley, Munjal said currently, the focus is on the successful launch of the Harley Davidson X440.

“We want to go out there and prove ourselves, get our customers, get them satisfied, get into large volumes, thereafter, we can always look at possibilities going forward,” he noted.

On exports of X440, Munjal said the focus remains on the domestic market for now.

“Once we’ve proven ourselves with the product and satisfied our customers, there are always possibilities of talking and discussing the future,” he said.

When asked if the company has set some sales targets in the premium segment over the next few years, Hero MotoCorp CEO Niranjan Gupta said: “Our aim is to cover a majority of the premium segment by revenue, and therefore, you can actually very well imagine what that would mean”.

He further said: “For instance, this product that we are launching, actually it’s in a segment, which is broadly one-third of the premium volume, but half of premium profits and revenues. So, that’s the significance of this, and there are other segments as well”.

So, by revenue, the company aims to cover the majority of the premium segment, not in five to seven years, but in the next three to four years itself, he noted.

Gupta said the company’s investments will continue to be more skewed towards premium and EV segments going ahead.

Hero MotoCorp plans to set up some exclusive stores and upgrade 35-40 per cent of the 1,000 major dealerships to house premium models.

“We aim to win in the premium segment, which is growing in the range of 25-30 per cent year on year…we also aim to have 100 premium stores by March-end,” Gupta said.

Elaborating on the journey with Harley so far, Munjal termed the tie-up as very fulfilling and gratifying.

“From Hero’s point of view, it’s been a tremendous journey so far, a lot of learning during the development process,” he noted.

Harley-Davidson Chairman and CEO Jochen Zeitz termed the collaboration between the companies mutually beneficial for each other.

He noted that the co-development of the new model with Hero is part of its strategic plan to selectively expand into categories, where Harley had no presence before.

When asked if Harley would like to utilise the collaboration with Hero to serve other markets, Zeitz said: “Right now, the focus is really manufacturing with Hero for the Indian market. And as I said, there’s always room for evaluation”.

But right now, the key is to be successful in India, he added.