Indian two-wheeler manufacturer Hero MotoCorp is working aggressively towards the sustenance of its status of being the top ranked company in the market. Hero MotoCorp, considered to be the largest two-wheeler producer in the world (by volume), has seen a steady decline in its market share. However, officials from the company have claimed that the firm has clear plans in place to get back the 50 per cent market share. The firm is going to launch a number of similarly developed two-wheelers, which are likely to generate high volume of sales.
Sources close to the matter have claimed that the company's management is quite confident of regaining its lost market share. Not only this, officials from Hero MotoCorp believe that it has the capability of surpassing its previous highest market share, which would be in excess of 50 per cent. Industry experts feel that the target set by the company is achievable and decisions made by it in coming months could prove to be crucial. In recent times, Hero MotoCorp has a diverse portfolio in terms of areas it is trying to focus on, which includes technology, new launches, employee welfare and growth on a global level. Reports suggest that apart from strengthening these areas, Hero MotoCorp also has its eyes on enhancing margins.
Currently the leader in the Indian two-wheeler market, the company had a share of 42.85 per cent of the total 13.97 lakh units that were sold in the fiscal year 2012-2013. Around 5 years back, the company had a share of approximately 49 per cent, which has declined due to a number of reasons. One of the main reasons of this decline is the rise of Honda Motors from Japan, which has made a huge impact of the Indian two-wheeler market. Notably, both these firms work under a collaboration that ended in the month of December in 2010. Honda made its foray into the Indian market in the year 2000 and since then, it has been been on a path of continuous growth. According to reports, the Japanese firm has a share of market share of approximately 20 per cent in the current fiscal year. This healthy percentage is primarily due to the Dream Series bikes it has introduced in the Indian market.
Sources have revealed that Hero MotoCorp is working on a project named 'Leap 20', which aims at achieving margin improvement by way of functional cost-optimisation. A few developments have resulted in the fall of the company's margins, including rise in cost inputs. The other reason that has hampered its margins is the expiration of the 100 per cent tax exemption tenure at the Haridwar production facility. Company reports have suggested that it had experienced a fall in quarterly net profits for the second quarter, which ended in June.
The plan to optimise the cost is expected to spread over a period of two and a half years. During this period, it will cut on material costs, develop efficient designs and reduce any sort of wastage.
