Hero Electric eyes 60% sales growth

Written by Yogima Seth | New Delhi | Updated: Apr 28 2009, 05:57am hrs
Hero Electric, with a market share of 45% in the electric two-wheeler industry, is riding high on new products and is eyeing over 60% growth in sales in 2009-10 at 50,000 units as compared to 31,000 units sold last year. This is expected to increase its revenue from Rs 70 crore to over Rs 110 crore in the current financial year.

Hero Electric plans to introduce four to five new products in this financial year including a new scooter towards the end of May which will help us register higher growth than the industry, says Naveen Munjal, managing director, Hero Electric, adding that several new initiatives taken by the company in the last financial year will further give a boost to demand. Munjal, however, refused to divulge details about the new products. Hero Electric had launched its new scooter Wave in southern India in December last year and it plans for a nation-wide launch of the vehicle in few months.

According to the recently formed Society of Manufacturers of Electric Vehicles (Smev), sales of total electric vehicles in the country (97-98% of which are two-wheelers) is estimated to jump by 45% in the current financial year at 1,60,000 units as compared to 1,10,000 units sold in 2008-09.

According to Munjal, the company is planning to add another 90 dealers into its fold from 260 now and to 350 by the end of March 2010. Moreover, with enhanced focus on below-the-line activities this year, we expect to increase our revenues by over 55% in the current financial year to over Rs 110 crore, he adds.

Hero Electric had, however, fallen short of its estimated target of 40,000 units in the last financial year, due to low sentiments, slowdown in the overall economy oil prices. The companys sales for 2008-09 were 22.5% less at 31,000 units than its earlier estimate of 40,000 units.

The company has recently introduced auxiliary batteries (power backup) in its Maxi range of two-wheelers. These batteries have an additional cost of Rs 7,000 that shoots up the cost of the vehicle to Rs 29,000-Rs 30,000 and gives an extended range of 40 km. In March this year, Hero Electric introduced Electric bike assistance mechanism wherein a Hero Electric owner might avail the 12-hour on road assistance and could even get the vehicle serviced at home.

According to the Society of Indian Automobile Manufacturers, total two-wheeler sales went up by 2.6% in 2008-09 at 74,37,670 units as compared to 72,49,278 units in the preceding year.