Harley connection can provide Hero the right thrust to enter the middleweight segment
When Hero-Harley partnership for announced last year, there were quite a few questions and ambiguities about its scope and objectives. Things are starting to get clearer now, as Hero MotoCorp is said to be planning twin model bikes for middleweight segment. This arrangement would be something similar to BMW-TVS venture that’s led to the production of bikes like Apache RR 310 and BMW G 310 R.
As part of Hero-Harley partnership, Hero is currently managing distribution, sales and service for Harley Davidson. As per the agreement, Hero will be developing mid-capacity bikes for Harley as well.
Rebadged versions of these will be developed under the Hero brand also. These are expected to be positioned as relatively affordable options, as compared to Harley bikes of same capacity. The twin models are expected to share much of their hardware such as engine, chassis, etc.
Challenger to Royal Enfield
Globally, the middleweight motorcycle segment comprises products with engine capacity of 500cc to 900cc. In the Indian market, the preferences are skewed heavily in favour of 350cc-400cc motorcycles.
This segment is dominated by Royal Enfield, which commands around 90% market share. This is where Hero will be positioning its middleweight motorcycles. According to the company’s CFO, Niranjan Gupta, the development of these motorcycles is already underway. However, there’s no exact timeline about when these bikes will be unveiled.
With Harley’s support, Hero could get a good start in the middleweight motorcycle segment. It can also seek encouragement from the fact that Honda CB350 has been registering consistent sales month after month. New products in this space may not influence hard-core Royal Enfield fans. However, folks with a neutral outlook can definitely think about trying something new.
Portfolio expansion
For years, Hero has remained the undisputed leader of commuter motorcycles. However, its dream of creating a bestseller in premium motorcycle segment is yet to be achieved. A number of attempts were made in the past such as 225cc Karizma ZMR. This had to be withdrawn in 2019 due to lack of desired sales numbers.
Hero’s current portfolio maxes out at 200cc with products like Xpulse 200, Xpulse 200T and Xtreme 200S. These have been generating decent sales numbers, but there’s need to expand portfolio. The profit margin is much higher with premium motorcycles. For example, the profit margin on Pulsar is around double that of Hero’s bestseller Splendor.
It will be interesting to see how the market responds to middleweight Hero motorcycles. As of now, the brand is synonymous with affordable commuter motorcycles. Breaking into the cult-like following of Royal Enfield has been a challenge for all manufacturers. It will continue to be so for Hero as well.
