Hero Electric
Hero Electric, once a prominent player in the rapidly changing electric vehicle market, seems to be having difficulty keeping up with the market. Hero Electric demonstrated its expertise in 2022 with an impressive sales figure of 98,939 units, establishing itself as a major player in the electric mobility market. However, 2023 reports a stark decline in growth, with Hero Electric reporting a sharp decline to a mere 29,800 units sold. This significant setback raises concerns about the brand’s performance and calls for an investigation into the factors contributing to its reduced market share, which currently stands at a pitiful 3%.
The global adoption of sustainable alternatives has led to the increasing popularity of electric two-wheelers as essential components of urban transportation. Hero Electric entered this market with the goal of providing affordable and environmentally friendly solutions, but despite these lofty goals, the company’s recent sales decline suggests that it is struggling to stay relevant and competitive. A few factors, including competitor technological advancements and changing consumer preferences, may be behind Hero Electric’s difficulties.
We will examine the many variables that led Hero Electric to retrench from its once-dominant position in the industry as we explore the causes behind the company’s apparent fall in the EV market.
1] Hero Electric’s Limited Marketing Impact and Low Visibility
Hero Electric’s declining presence in the electric vehicle (EV) market can be attributed to its cautious marketing strategy. The company has taken a reserved approach in an industry where being dynamic and visible is crucial. Unlike its more assertive rivals, Hero Electric’s subdued marketing efforts have led to a lack of brand recognition and reduced consumer awareness.
The company’s limited involvement in online marketing, minimal vehicle discounts, and restrained display of specifications are in stark contrast to the strategies employed by its competitors. In today’s competitive EV market, a more proactive marketing approach is essential, as effective communication and increased visibility can make a significant difference. By addressing the challenges posed by its limited marketing approach, Hero Electric can regain its prominence in the ever-evolving world of electric vehicles.
2] Hero Electric’s Market Position Threatened by Government Subsidy Hurdles
In August 2023, Hero Electric faced another setback in the market. The government decided to stop providing subsidies to seven original equipment manufacturers (OEMs), including Hero Electric. This decision was made due to unpaid dues and non-compliance with subsidy regulations. It was discovered that these companies had received fiscal incentives under the scheme but had allegedly violated subsidy norms by using imported components instead of ‘Made in India’ components for electric vehicle production. This led to the withdrawal of subsidies and added to the difficulties faced by Hero Electric in an already competitive and ever-changing market.
3] Hero Electric faces tough competition from other OEMs in the market
Hero Electric faces numerous challenges in the EV market, particularly due to the intense competition from other OEMs such as OLA Electric, Ather Energy, and TVS. These formidable players have surpassed Hero Electric by employing aggressive sales tactics, introducing innovative technologies, offering appealing features, and providing a wide range of products.
The competitive landscape has witnessed rivals implementing effective marketing strategies, including enticing discounts and cutting-edge technologies, which have collectively overshadowed Hero Electric’s presence in the market. The company’s failure to keep up with these advancements and differentiate itself in a rapidly evolving market has placed Hero Electric at a significant disadvantage, impacting its ability to attract and retain a substantial share of consumers in the competitive electric vehicle sector.
4] Strategies for Competitive Pricing
Hero Electric has faced challenges in maintaining its market share due to its inability to offer competitive prices compared to other manufacturers. The company’s pricing strategies have not met consumer expectations and perceived value, resulting in a potential loss of customers who prioritize affordability in their purchasing decisions.
Reports suggest that Hero Electric struggles with its pricing, as it is considered relatively high in comparison to similar products in the market. Individuals with a budget of less than one lakh may find it difficult to afford their scooters at this price point. Moreover, customers have expressed concerns about the features and specifications offered at this specific price, such as the range and top speed, which they feel are lacking.
On the other hand, Ola and Ather, two other prominent OEMs, offer a variety of products with different price options, discounts, and impressive specifications. This makes their offerings more attractive to potential customers. However, this difference in pricing poses a challenge for Hero Electric as they strive to meet consumer expectations and effectively compete in the ever-changing electric vehicle market.
5] Performance and Range Concerns
Hero Electric’s market position has been negatively affected by consumer feedback on the performance and range of its vehicles. Potential buyers are hesitant to consider Hero Electric as a viable option in the EV market due to the perception that its electric vehicles have limited range and inferior performance compared to other alternatives. Additionally, the company’s failure to expand its product range to cater to the diverse preferences and needs of consumers has resulted in missed opportunities to capture a larger market share and effectively compete against manufacturers offering a wider variety of electric vehicles.