In a first of a kind decision, Hero MotoCorp has suspended any further bookings of Harley-Davidson X440 after claiming to have received as many as over 25,000 bookings for the premium motorcycle.
However, the move was not triggered by any supply chain or production issue that has frequently plagued the auto industry, but it was rather a part of a calculated strategy of keeping the launch exclusive with a limited reach.
Hero MotoCorp’s newly appointed CEO Niranjan Gupta said, “Stopping the booking is part of the plan considering the marketing and sales strategy we have. It is going to be a pull-based plan rather than a push-based model.”
This is the first time that an automotive company has purposely restricted sales volumes of a new model without facing any production-related problems to create scarcity of the product.
The Harley’s launch is considered to be yet another attempt by the two-wheeler market leader at cracking the premium segment which has remained a challenge for the 40-year old Delhi-based company.
Known for its 100cc economy bikes such as Splendor and Passion, Hero made multiple attempts over the past several years in gaining a foothold in the high-margin, 150cc+ motorcycle segment.
According to data shared by the Society of Indian Automobile Manufacturers (SIAM), Hero’s market share in the 150cc+ motorcycle segment is 3%, while that of market leader Royal Enfield is 38% followed by 19% of TVS Motor Company.
This lucrative segment where Royal Enfield, Bajaj Auto, TVS Motor Company and Honda have a strong presence, have seen several model interventions in recent years thanks to growing demand for premium category bikes.
For instance, Bajaj Auto’s quota for the first 10,000 units of the Triumph Speed 400 bike was met in just a few days after bookings were opened. The Harley X440 and the Triumph Speed 400 compete with each on pricing and segment.
About 65% of the bookings for the X440, Hero claims, are for the motorcycle’s top-end variant, priced at Rs 269,000. The company further added that it intends to commence production of the X440 in September before starting deliveries in October.
“We don’t need to have the product in advance to create the demand. The demand is actually going to chase the supplies. All this will create a strong brand credibility in the premium segment,” Gupta added.
Hero aims to keep the momentum in the premium segment going with multiple product launches planned in the coming months.
The company plans to have 100 showrooms that will sell its premium bike range, a strategy similar to Honda’s BigWing chain of showrooms, which are one-stop sales and service centres for premium Honda bikes.
The premium strategy of Hero involves launch of three to four new models including the return of Karizma, one of the most iconic brands owned by the company but was phased out due lack of demand.
“Karizma which is our iconic brand, is coming back in a different avatar very soon. In Q4 on the very same (Harley) platform we will have another cross-badged product,” Gupta added.
