Hero MotoCorp rides into pre-owned 2-wheeler biz

Hero MotoCorp, the country’s biggest two-wheeler maker, has made an entry into the used two-wheeler business to offer buyers an option to exchange their old motorcycle or scooter with a new Hero product. The Pawan Munjal-promoted firm had exited this segment because of taxation related issues several years ago.

The introduction of the goods and services tax (GST) last year made the company re-look at this business.

The company has, as a pilot project, rolled out the used-vehicle facility at 100 showrooms so far under a brand called ‘Hero Sure’. The previous used-vehicle business had also existed under the same brand name but was closed in the early 90s. “Hero Sure helps the customer get the best price for his vehicle on the basis of a transparent evaluation process. About 5,000 vehicles are currently exchanged on an average every month at the Hero Sure facilities,” a Hero MotoCorp spokesperson told Business Standard.

The firm said the response received was ‘positive’ and there were plans to go for a rapid expansion of this used-vehicle facility to more locations in different parts of the country. The company has about 6,500 touch points across the nation for sales and service. So, the number of ‘Hero Sure’ facilities is expected to grow manifold from 100. The volume of vehicles coming to Hero Sure can multiply rapidly from 5,000 every month as Hero sells over 7 million units every year. The country’s biggest carmaker, Maruti Suzuki, which operates a pre-owned car network under the ‘True Value’ brand, does one-fourth of new sales through exchange.

“We have a huge customer base, including more than 10 million active customers in our customer relationship management programme — ‘Hero GoodLife’. We intend to leverage this platform to further popularise Hero Sure,” the spokesperson said. Hero Sure, the firm believes, will help to tap the huge potential in the replacement market by facilitating exchange of used two-wheelers through a transparent process that creates best exchange value for the customer.

Talking about the first usedvehicle facility, which had to be shut down, Sanjay Bhan, the head of sales and after-sales at Hero, said, “There were headwinds in terms of the overall taxation regime, which prevented us from going all out. But with the GST in place, the environment is very conducive.”

According to Bhan, the firm sees this segment as an opportunity as many of its customers want to upgrade. They want to exchange and a fair deal. “And not just our customers who want to upgrade but also people out there want to buy from genuine sources and also have the flexibility of getting those bikes reconditioned. So, we do see a lot of upside there,” he said.

The list of states where Hero has rolled out the used-vehicle facility includes, Tamil Nadu and Gujarat.

“Tamil Nadu is one state where we are doing extremely well, we have got very good response from Tamil Nadu and Gujarat. These are the two states where we focus ourselves on. It is quite encouraging and we hope to open up soon in other markets,” Bhan said.