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Hero MotoCorp has said in its Annual Report for 2019-20 that the two-wheeler industry currently faces short term challenges because of the pandemic, but is showing signs of overall pan-India growth.
Mr Pawan Munjal, the Chairman at Hero MotoCorp said that there are growth opportunities for the brand in both domestic and international markets.
Mr Munjal said, "The short-term business outlook remains uncertain due to the Covid-19 pandemic. However, the long-term story of India and that of the two-wheeler industry remains intact, strong and positive."
The brand feels that their global footprint that has been built over the past five years, and gives them access to over 40 countries, is allowing for expansion plans.
Hero MotoCorp say that they have invested more in research & development than other other two-wheeler manufacturers in the industry over the last five years.
Mr Munjal also said that the Hero MotoCorp was close to creating history when the brand sold its 100 millionth vehicle - a feat it will achieve this year.
The Chairman revealed that the company's cash reserves now stand at Rs 14,096 crore, has a strong balance sheet (including projected), and that the brand continues to remain debt free.
Hero MotoCorp predicts that demand for two-wheelers will increase this year because of the space created for personal mobility by the Covid-19 situation. The brand said that the segment will be stable within the next few months.
The company predicts that the festive seasons closer towards the last quarter of the year will bring high demand and boost the industry's and its dependant industry's economies.
Hero's short term views are that the economic cost of the lockdown will prolong economic recovery across the nation, but initiatives like corporate tax rate cuts, cash transfers to farmers, rural development funding, will allow for better growth.
Hero MotoCorp has managed to collaborate with its international partners through the slow economic activity in the country. The brand has appointed a new distributor in Peru and now has a presence in 40 countries.
The brand has been following a strategy that builds on the momentum gained during launches of new vehicles, by targeting complementary industries like the motorcycle-taxi industry.
The company said, "For example, we plan to build on the momentum we have already gained in the Asian and Latin American markets by launching new models in the 150-160cc category."
"Having grown in double digit in Africa during FY20, we are sharpening our focus among the 'Boda-Boda' (local two-wheeler taxi) riders," it added.
Thoughts About The Hero's Annual Report Findings
While there is some economic growth at the moment, the possibility of it declining again is fairly high. The second quarter reports of the current financial year will give one a better idea of where the economy is headed.