The reduction of GST to 18% has sparked renewed demand in India’s two-wheeler market, giving a boost to manufacturers like Hero MotoCorp. Kerala has emerged as the company’s largest premium market, with models such as the Xpulse seeing record sales. At this juncture, Ashutosh Varma, Chief Business Officer of Hero MotoCorp, shared insights with Mathrubhumi on market trends, festive season strategies, and upcoming launches.

Excerpts from the interview

We're seeing a significant increase in the buying of new two-wheelers after the GST was dropped to 18%. Can you help me understand the real situation at Hero MotoCorp? What's the growth percentage like?

The GST reduction to 18% has given the market a new momentum. Kerala’s Onam market had a strong start, and festivals like Onam, Navaratri, and Ganeshotsav have helped the industry reach double-digit growth. However, the two-wheeler market has not yet reached pre-COVID levels. In 2018-19, the annual industry value was ₹210 lakh, which fell to ₹190 lakh last year. Vehicle price increases have contributed, and naturally, the market will take time to recover. But we expect the GST change to restore the two-wheeler market to its former glory.

Hero MotoCorp is doing well in both rural and urban markets – where are the numbers higher?

Currently, Hero is slightly ahead in urban markets. With incomes up to ₹12 lakh exempt from income tax from this year, the benefit first reflects in urban market itself. Rural markets are responding positively to economic changes, and sales will pick up during Diwali. After the festival season in Gujarat and Bihar, with Tamil Nadu celebrating 'Pongal', it is expected that Indian rural households will see an increase in wealth, and the vehicle market will become more active.

Are people investing more in premium bikes nowadays, and is the GST cut helping them afford a higher segment?

People are upgrading not only within premium segments but also moving to higher cc bikes. Similarly, the people who are otherwise less likely to buy motor bikes has now entered the market. Models like the Splendor have crossed double-digit growth due to successful campaigns. Entry-level models such as HF Deluxe remain active, while higher-class 125cc Extreme, 160cc, and 250cc Extreme continue to perform. The Xpulse is currently the most popular model. Kerala has the highest number of Xpulse bikes in India, more than any other state. Even though it is not the most populous state in India, Kerala still leads in Xpulse ownership. This is an adventurous bike. The Xpulse appeals to adventure lovers in Kerala and is suitable for all kinds of roads.

Hero is the leader in the ICE motorcycle segment, you've launched Vida VX2 and now with the electric scooters market growing. What's its response?

Hero remains number one in ICE motorcycles. In the EV segment, we secured maximum market share. Following the launch of Vida VX2, the battery re-service model gained popularity, reaching EV enthusiasts. We lead in 56 major Indian cities. Currently, supply struggles to meet demand, but corrective measures are underway. Vida VX2 has received strong acceptance; it is the only bike with a removable battery that allows easy indoor charging.

The 125cc segment is your power spot; can we expect new products in the same segment?

Definitely. This month, a new 125cc model will launch. Glamour X will be India’s most futuristic bike, incorporating Xtreme technology and kick-start facilities suitable for Indian conditions. It includes multiple first and best-in-class features and will launch this Diwali.

It's festive season across India, but not a big festival in Kerala. How are you looking at the Kerala market, and are there any big offers or discounts planned to keep up the hype post-Onam?

Kerala remains one of Hero’s key premium markets. Xpulse enjoys the highest sales here. Hero started its first premium dealership in Kozhikode, now a flagship, and maintains 11 of its 100 premium dealerships in Kerala. Given that Kerala consumers value premium vehicles, we are strengthening our presence. Premium showrooms are divided into four categories: Harley-Davidson bikes, Xpulse and similar models, Extreme series, and Vida electric scooters. Various activities are conducted through these showrooms.

There's a lot of buzz about the Xpulse 400 – can you tell me more about it, when to expect?

The 400cc Xpulse is under production. High-cc engines are tested on extreme terrain through rally races. The bike was designed by our riders for success, and we are confident it will be a market hit once launched.