Hero MotoCorp faces steep decline in footfalls as ban on Rs. 500 and Rs. 1,000 currency notes impacted sales heavily
The Hero MotoCorp registered record sales during the festive season, but now it is severely hit by the demonetisation effect. In the first two days after demonetisation was announced, footfall in Hero showrooms dropped to 15% of what it was in October. Now the percentage has increased to 50% and the company hopes to get back to 100% soon.
Speaking about the decline in footfall, Mr. Pawan Munjal, CMD of Hero MotoCorp has said, its sales is gradually inching toward normalcy. On 8th November, 2016 central government announced ban on Rs. 500 and Rs. 1,000 currency notes. While purchasing motorcycles or scooters, customers generally pay a large amount in cash. With the Rs. 500 and Rs. 1,000 currency notes banned, paying cash is hard now and in rural areas it is even harder.
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Not only the Hero MotoCorp, but the entire auto industry is suffering from this sales decline since the demonetisation is in effect. The two-wheeler industry seems to have been affected most. But in spite of facing sales decline, Hero boss Pawan Munjal has praised the move. He hopes nation will benefit from this visionary and long-term move and for that, the company is ready to bear the pain for next few days.
In the period of April to October this year, the two-wheeler sales in Indian market were increased by 16%. Hero MotoCorp sold a whopping 6,74,961 units in September during the festive season and registered 3.64% growth in last month. In between September 2015 and September 2016 Hero has sold 64,937 units, marking a growth of 11.01%. This shows, how the company’s sales were increasing, but now with the currency ban in effect it is feeling the pinch.
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Hero MotoCorp is presently the largest two-wheeler manufacturer in India in terms of sales volume. The company sells around 14 models including motorcycles and scooters. It is also the leading brand in highly competitive 100 cc and 110 cc commuter motorcycle segment in domestic market.
Source: ET Auto