Hero MotoCorp scrambled on Friday to reassure investors and customers that all its brands are in good health despite the sales de-growth seen last month and said it expects sales to revive during the festive months.
“All our brands are in good health and we have a robust communication plan leading up to the festive season,” said Anil Dua, senior vice-president (marketing & sales), Hero MotoCorp.
For August, the company had reported a 12% drop in sales at 443,801 units.
“The overall macro-economic sentiment has adversely impacted two-wheeler retail in both urban and rural markets. Consequently, growth in the two-wheeler industry has come down,” Dua reasoned.
“We are, however, quite hopeful that retail sales will pick up during the coming festive season,” he said.
The clarification comes in the wake of news reports that Hero MotoCorp has decided to cutproduction this month to address an inventory pile-up.
The company’s Splendor family, which includes four models and contributes almost 35% of the company’s overall volumes, is reported to have taken a hit in terms of production cut.
According to analysts, conversions of Splendor Pro and Splendor Plus have been impacted after the company dropped the ‘Honda’ tag from the brand.
“We understand from Hero dealers that after the company has dropped the ‘Honda’ tag from the Splendor Pro & Splendor Plus, conversions have been impacted by 5-10%. This is worrying as both these models combined account for around 90% of Splendor and thereby 35% of total volumes,”Ashish Nigam, analyst with Antique Stock Broking, had written in an August 30 note.
But Dua said the company’s stable remained healthy.
“Even the new models which have been launched under the Hero brand-name, such as the 150cc bike Impulse, the 125cc bike Ignitor and the 110cc scooter Maestro have received excellent response from customers. For example, Hero Maestro has received an excellent response, taking the total tally of our scooter sales to 45,000 units in August, which is the highest-ever scooter sales reported by us in any month,” he said.
Some dealers also said that Splendor sales have started reviving.
Dua said the company is geared to make the most of the coming months. “We will ensure that there is sufficient stock available at the dealerships to leverage the high retail opportunity that comes with the festive season.”
