#NDTVProfitAtWEF | #HeroMotoCorp's Niranjan Gupta says drivers of growth transitioning from rural demand to include urban and urban premium category too.
Watch him discuss this and more with Niraj Shah at #Davos2024. #WEF2024 #WEF #NDTV
Read: https://bit.ly/3vE6VYf
Watch him discuss this and more with Niraj Shah at #Davos2024. #WEF2024 #WEF #NDTV
Read: https://bit.ly/3vE6VYf
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TVTranscript
00:00 We are at the World Economic Forum, as viewers would know, and let's get the maverick CEO
00:05 of Hedo Motor Co., Niranjan Gupta, to talk to us at NDTV Profit on the sidelines of the
00:10 WEF.
00:11 Mr. Gupta, what a difference 12 months can make.
00:15 Last year, this time around, we were talking about whether an incumbent two-wheeler company
00:21 can match up to the onslaught of the newer age incumbents.
00:27 Share prices were kind of down in the doldrums.
00:30 12 months, things seem to have turned around completely.
00:32 You must be a happy man.
00:33 Well, I don't comment on the share price.
00:38 But yeah, I mean, happy with the way that industry growth has come back, first of all.
00:45 Happy with the way innovations are happening.
00:48 Happy with the way EV field, the EV thing is moving up.
00:52 And happy with the way also the way we've moved forward on our journey on premium and
00:57 many other fronts.
01:00 So I would say, yeah, I mean, it's a good place to be.
01:05 And also happy with the way country is shaping.
01:08 I think India's growth story is yet to be seen.
01:13 And the next few years are very, very positive.
01:16 Yeah, well, cross fingers, all 20 of them.
01:19 And I'll talk about the India thing as well with you, because I would love to understand
01:22 how you are kind of talking about the India story over your meetings here.
01:25 But just firstly, a few things on HIDO.
01:27 We're talking for the first time after you've taken over as well.
01:32 How do you envisage what changes you bring about now which will have fruition over the
01:38 course of the next three months, six months, 12 months, albeit over the next three, four,
01:41 five years as well?
01:43 Because you've been, quote unquote, bracketed as this traditional 100cc dominant company,
01:50 which is now trying to, or which is turning around and doing a lot more beyond that as
01:55 well.
01:56 Yeah, absolutely.
01:57 And you can see, I'll just give you two, three pointers towards that.
02:03 We had talked about our strategy of building a full portfolio premium, right up to 400cc
02:10 plus, if you see even three years back.
02:12 We've talked about that, and our R&D teams have been working on that.
02:16 Our extension to putting a tech center in Germany has helped on that.
02:21 You can see that we've launched the 440cc Harley Davidson in within less than three
02:25 years of signing the agreement.
02:27 That means our R&D has come off edge.
02:30 We launched Charisma in the 200 plus cc bracket.
02:34 We have another 440cc which is coming up in this quarter.
02:37 So you can clearly see that from a 100 and 125cc game, which were, of course, that served
02:44 its purpose, by the way, as Hero, as a company, we've been at the forefront of providing mobility
02:49 to masses.
02:50 I mean, providing wheels to millions of Indians, 112 million, is a big daunting task which
02:56 we have done.
02:57 And now, of course, we are very seriously on this premium wave.
03:01 And you can already see some products launched, more products in the offing, plus revamping
03:06 not just product portfolio, we are revamping our stores.
03:09 In the last 300 days, we have revamped 300 of our stores, 300 stores in 300 days, we
03:14 are calling it Hero 2.0 stores.
03:17 New premium stores launched, which will have this exclusive premium products, so which
03:21 will create the brand imagery, as well as, of course, be a selling point.
03:25 Three we have launched in this calendar year, we will take them to 100 plus.
03:29 So we are in everything that we are doing.
03:32 We are talking scale, we are talking speed, we are talking synergy.
03:37 For instance, we decided to use our Hero dealers for selling our EV product.
03:42 So therefore, from three cities, we are moving to 100 plus cities and 100 plus dealers in
03:47 just nine, 10 months period of time.
03:49 So speed, scale, synergy, and of course, simplification.
03:54 How do you simplify the org structure?
03:55 How do you simplify the ways we work?
03:58 These are the four S mantras that we are driving now.
04:00 So well, there is Maverick, and it's got the imagination, but there are 650 plus CC
04:07 bikes, right?
04:08 I mean, that's something that not people would have thought of from Hero's table.
04:13 So tell us a bit about this strategy and about what can we expect on this front in 2024?
04:19 You're absolutely right.
04:20 If you look at 150 CC plus, you talked about and the number of products will only go up
04:26 as you move forward.
04:28 So what you expect is that in each of our product, we will have at least one first in
04:36 class and one best in class feature.
04:39 And that powered by the brand association that we are creating, that powered by the
04:43 premium stores that we are creating.
04:46 And more importantly, the less spoken is that's powered by the entire digital journey that
04:51 we are putting in place.
04:52 I would say that in auto, we talk about a lot about product.
04:56 We don't talk about the digital that you can put in place to enable.
05:01 We are putting in place a full digital journey on the customer for the premium, right from
05:05 the time customer comes in touch with us first time from a booking or even understanding
05:09 the product to actually the delivery from the full digital journey, which will be embedded
05:13 with this upmarket physical stores.
05:16 That's a big move that we are doing in that space.
05:19 And all of this, as you will see over the next three to five years, as the portfolio
05:23 builds up and everything builds up, we aim to win in premium and therefore, meaningful
05:28 market share.
05:29 While I'll not give out a number, but for sure, we are moving in very, very surely and
05:34 with speed.
05:35 So traditionally, I remember all through my commenting years, the talk was that if rural
05:41 picks up, you can expect the fortunes of Edo Motocorp on the bourses to pick up as well.
05:45 Now, my question to you is, for 2024, could that still be a factor?
05:51 And would you expect rural to pick up?
05:52 And would that change by let's say 2025 or 2026, that it did not be a rural pickup that
06:00 will determine what Edo Motocorp does on the bourses?
06:03 I'm not asking you to comment on share price, but I'm essentially talking about the fundamentals
06:06 of the company.
06:07 Understood.
06:08 As far as the drivers, let me pick it up from the drivers of growth perspective.
06:11 Yes.
06:12 Yes, our drivers of growth earlier was hinged upon more on the rural and more on this one.
06:19 As we are moving forward and very rapidly, you would see that drivers of growth are moving
06:24 through the urban centric towards more premium.
06:28 So and rural, of course, we still at the entry segment at the 100, 110, we are the lead market
06:33 share player.
06:34 Our role there will be to expand the category.
06:37 It's not about market share anymore.
06:39 And I can tell you there's a huge opportunity even there.
06:42 Because you have lots of Indians, almost 400 million people who do not have mobility, means
06:48 of mobility.
06:49 India is not fully penetrated by any stretch of imagination.
06:53 It is only a question of that class coming back to income and coming back to consumption
06:57 and spending.
06:58 The need is there.
06:59 So our role there is to expand the category.
07:01 As far as premium is concerned, our role is to build our portfolio to win in premium.
07:05 And therefore, you see more and more products coming there on that stable, but will continue
07:10 to expand the category at the bottom end.
07:12 And obviously, win as far as premium is concerned, expand our portfolio at the top end.
07:18 So expand the category at the bottom end, expand the portfolio at the top end.
07:21 That's what the strategy is.
07:22 Even as you do both simultaneously, the drivers for growth going ahead will not necessarily
07:27 hinge largely on this.
07:28 It could probably be a mix of both.
07:30 The shape of portfolio will keep changing.
07:34 But I would say India is a story of many Indias.
07:36 Now, why rather than solely being dependent on the growth in the rural, it will be now
07:42 growth coming from all classes, which is bottom of pyramid, which is middle and the premium
07:47 and upper premium.
07:48 So we'll be participating in the growth of each of these segments, which earlier we were
07:54 not able to because we did not have the portfolio, while driving growth at the bottom end of
08:00 the pyramid, driving growth in rural.
08:01 That's our responsibility, to drive growth there, to drive category there, and participate
08:06 in the growth as far as premium is concerned.
08:08 Got it.
08:09 You mentioned about the India story and the India decade.
08:12 Now, I would love to understand, what is it that-- what are the kind of meetings-- I mean,
08:15 I don't-- I just want to flavor.
08:18 What is the message that you are carrying?
08:19 What is it that you expect to hear from people when it comes to HIDO in India and India itself?
08:25 Look, as far as India itself is concerned, I'll take that as first.
08:30 Over the last few years, a lot of capex spending that has happened by the government, the private
08:36 spending will follow.
08:37 Clearly, all this capex spending with a gestation period then results in the demand, in demand
08:42 consumption and growth income.
08:44 So that's bound to happen.
08:45 We're already starting to see that happen.
08:48 As far as HIDO is concerned, HIDO has been at the forefront of participating and helping
08:55 India develop.
08:56 40 years, the company has been providing mobility to masses, to the rural areas, who then rise
09:02 up the income levels.
09:03 We have 112 million plus customer base.
09:06 So as far as HIDO is concerned, we-- our vision is be the future of mobility.
09:11 We want to ensure that everyone is mobile, that you provide wheels to the nation in every
09:17 which way possible.
09:19 Okay.
09:20 There is a lot of conversation that I've had with a few people off air, even yesterday,
09:27 about how quote unquote China freeze, even if we don't call it a freeze, but a bit of
09:33 a cold outlook towards investments in that region would enable a lot more into India,
09:40 not that we haven't seen it, but a lot more can happen, India, rest of Asia, et cetera.
09:45 Your overarching view on this, if you have one?
09:47 Totally agree with that.
09:48 I mean, if you look at the large, two large demographies in the world, it's India and
09:52 China.
09:53 And you look at India, China had their growth story, which started 25, 30 years back.
09:59 And that has played out.
10:01 And in a sense, and obviously, whichever word that you call it, they're going through that.
10:06 India's growth story, one would say, has just begun.
10:09 Now, you have a population of 1.4 billion and counting, you have a per capita consumption,
10:19 which has got huge headroom to grow.
10:21 You've got an average age profile, which is on the favorable side of the productivity,
10:28 as in classical economics that you call it.
10:30 You have stability of the policies that are there, and you have huge infrastructure investments
10:36 that are happening.
10:37 So where would any investor from the world put their money in?
10:41 I mean, there's no way you can avoid India.
10:44 And that's why you see investment coming in into India.
10:47 You also see manufacturing coming in into India.
10:50 And that's because, again, of the plus one strategy and the others, that obviously, with
10:57 the way we are functioning, even politically.
11:03 And that way, because as country, if the country is if you look at it, now this is a country
11:12 where you see more long-term stability of how we are operating.
11:16 So I think it's India's time to, I would say, not just make in India, make for India, but
11:22 actually make for world.
11:23 Thank you.
11:24 Thank you.
11:24 Thank you.
11:29 Thank you.