Hero MotoCorp announces price revision for motorcycles and scooters with OBD2, wef April 1, 2023
Leading two-wheeler manufacturer, Hero MotoCorp announced a price revision of some of its motorcycles and scooters from April 1, 2023. This revision is due to the cost increase associated with the mandatory transition to On-board diagnostics (OBD) 2, a more advanced diagnostic system for vehicles.
OBD 2 is a more advanced diagnostic system for vehicles, which is mandatory for all new vehicles sold in India from April 1, 2023. Implementation of this system requires the use of additional inputs. This has increased the cost of production for the company.
Hero MotoCorp commits to providing financing solutions for customers
Hero MotoCorp has committed to providing financing solutions to help ease the impact of the price hike on its customers. This commitment is expected to maintain customer loyalty and prevent the price hike from negatively impacting sales figures. While the price revision may be a short-term setback for consumers, implementation of OBD 2 is expected to have long-term benefits for vehicle health.
But naturally, cost of production has increased due to the use of advanced technology and additional components required for OBD 2. Hero MotoCorp’s price revision is pegged at about 2 percent, and will vary by specific models and markets. Exact models affected and to what extent are not currently specified.
Cost increase due to mandatory transition to On-board diagnostics 2 (OBD 2)
Despite the price revision, Hero MotoCorp is optimistic about the growth prospects of the two-wheeler industry in rural markets. Rural markets in India have been witnessing robust demand, which is a strong indicator of healthy crops. This growth momentum is expected to continue into the upcoming festive season towards the latter half of the fiscal year.
It is worth noting that the cost increase due to the OBD 2 transition is not unique to Hero MotoCorp. Other automobile manufacturers in India are also expected to revise their prices upwards due to the same reason. Rising commodity prices and increasing input costs continually impact vehicle price hikes.
Price revision not expected to negatively impact sales figures
This price revision is a necessary step to maintain profitability and sustain the growth of the two-wheeler industry. While the impact on customers may be modest, Hero MotoCorp’s focus on financing solutions and growth momentum in rural markets are positive markers. And are expected to mitigate any potential negative impact and sustain the growth of the two-wheeler industry.