Hero MotorCorp, the world’s largest manufacturer of motorcycles and scooters powered by internal combustion engines (ICE), is targeting a global leadership position in the electric two-wheeler segment, according to the company’s annual report for FY22.
The company will introduce its maiden electric two-wheeler under dedicated electric mobility brand Vida during the festive season. The model was scheduled to be launched in March, but the introduction was deferred to June. Now it has been postponed further owing to the ongoing supply chain issues.
In FY22, Hero MotorCorp had garnered cumulative volumes of 4,944,150 units. It sold 4,643,526 units in the domestic market and exported 300,624 units.
“This year will see Hero MotoCorp claim its position in the exciting clean mobility space in a bold avatar. Hero MotoCorp will transform its leadership in the ICE market into the electric vehicle space — globally,” chairman and CEO Pawan Munjal informed shareholders.
Hero MotoCorp had crossed the cumulative production milestone of 100 million units in 2021 since its inception in 1984. It breached the one million unit-mark in 1994, 25 million units in 2008, 50 million units in 2013 and 75 million units in 2017.
“As we have our eyes on the production of the next 100 million by the end of 2030, we are taking strides towards sustainability and electrification with a single-minded determination to be the future of mobility,” Munjal said.
“All I can promise is that, while the first 100 million was achieved with the production of motorcycles and scooters, the next 100 would certainly be an all-new, innovative and greener body form,” he said.
Hero MotoCorp introduced a new strategy, R4, in 2021 to “recalibrate, revitalise, revolutionise and revive” its global business. “This programme has been a strong success and our global business delivered 300,624 two-wheelers in 43 markets during the year under review,” Munjal said.
The company expanded its presence in the Central and South American markets, including Nicaragua, Honduras, Mexico and Argentina, through strategic partnerships in FY22. Munjal said the goal is to garner 15% of total volumes from global markets by 2025.
“With our partnership with Gogoro of Taiwan, we will bring the largest battery-swapping network to India,” Munjal said. Hero MotoCorp is also in discussions with Bharat Petroleum Corporation to set up battery charging infrastructure for EVs across the country.
The two-wheeler industry faced multiple headwinds owing to weak demand and continuous challenges in the supply chain in FY22. Besides, the rural markets, which account for over half the annual sales of motorcycles and scooters in India, remained under economic stress.
“Higher material costs, shortages of products and services and soaring fuel prices increased the cost of ownership, further dampening consumer sentiment and their ability to buy,” Munjal said, adding that all of these events impacted two-wheeler sales in India.
He said to offset the adverse impact, Hero Motocorp focused on expanding its exports, optimising costs, prioritising projects, improving internal processes and re-evaluating options.
“While the rising costs for freight played spoilsport, we navigated through these challenges with grit, endurance and determination to ensure that our products reached our distributors and customers,” he said.
The company reported total income of `29,802 crore for the year ended March 2022. While Ebitda came in at Rs 3,369 crore, net profit stood at Rs 2,473 crore.
