Interview Sep, 05 2016

'We have 70% Market Share of the Industry' Sohinder Gill

Following the zest to create a benchmark, Sohinder Gill, CEO, Global Hero Electric shares that how his brand took the market by storm and reached to become one of the leading brands in the electric two wheeler segment.

By Deepankar Hemnani
'We have 70% Market Share of the Industry' Sohinder Gill

Undermining the growing ratio of pollution, increasing number of vehicles and the eradication of fossil fuels, there was a big demand that was igniting to shift on an eco friendly source of energy. Following the zest to create a benchmark, Sohinder Gill, CEO, Global Hero Electric shares that how his brand took the market by storm and reached to become one of the leading brands in the electric two wheeler segment.

Please share the USP of your brand? What are the factors that pulled you back while expanding your business? - add the below points.

Hero Electric has 70% of the market share of the industry, the volume of sales are so low that it does not paint an encouraging picture. The USP of our products is that they are eco-friendly, low cost and light weight, our products are easy to use, and no registration or license is required for the product. We are one of the oldest and leading players in the segment and that has helped us to expand and sustain Hero Electric. With having international footprints in over 12 countries through our A2B brand of electric pedelecs, we are exposed to the best of global technology and the same is introduced in our products.

There are factors that are pulling us back while expanding our business is that the government needs to take the lead to put up charging infrastructure to create a positive environment for EV users resulting in increase in demand.

What opportunity do you believe the electronic bike retail market has for a potential investor?

The National Electric Mobility Mission Plan 2020, of which FAME is a subset, was an excellent policy which was well-researched, drafted and documented. FAME, which is more of an implementation wing of the prescribed objectives in NEMMP, has, however, not been able to deliver what it promised and was expected. The major fault has been in the implementation of the incentives promised to consumers such as subsidies, rebates and cash backs.

The government needs to address the EV issue on war footing rather than put it on a backburner after some announcements of exuberance. The core areas that need to be addressed by the government are:

  • Probably the most fundamental aspect which limits the scope for EVs is the severe unavailability of allied infrastructural requirements for Electric vehicles such as charging points.
  • Providing essential financial support to EV manufacturers is necessary to stop them from burning out. The support should not come in the form of emergency doles or debt write-offs, but as a sustained form of financial investment that will help in market creation.
  • The government can set a precedent by using EVs in different governmental operations. This would provide an initial market of considerable size, set an example for citizens and provide a safe ground for experimentation and practical implementation of EVs. Such stable client base will also motivate manufacturers to undertake more Research and Development efforts to further reduce per unit cost of EVs.
  • The government has failed to create an awareness or interest in consumers regarding the use of EVs. There is no use trying to pass of the buck to individual manufacturers; given how they have already suffered losses being in the EV sector, they will be reluctant to further spend on creating consumer awareness.

3. Introduction of Li Ion technology which is a landmark and will open new markets and will attract customers which were kept distance from EV's because of inferior technology.

It is true that EVs are often viewed with a skewed vision of being ‘boring’ cars with limited range, performance and higher cost of acquisition. Presently, however, efforts are being made to bring in a paradigm shift in the performance of EVs. For instance, lithium-ion batteries are replacing the conventional devices, thereby bringing EVs at par with top-performing IC vehicles. The presence of strong charging infrastructure becomes all the more essential if such vehicles are to be popularized and utilized to their optimum.

The incentive for manufacturers to invest in developing such vehicles, however, will exist only if mass awareness is created to generate a point of inflection for the EV market. Infrastructural changes are long-term strategies that will take years to materialize. Till then, however, the government can intervene with policy frameworks and innovative solutions to ensure the survival of EV manufacturers. For instance, the giant e-commerce delivery network is an untapped resource that can be utilized to provide a market for Electronic Vehicles. Entering into collaborations with online platforms to utilize electronic two-wheelers for their deliveries might prove to be a social experiment that can be accepted easily, as these platforms mostly cater to the environmentally-conscious urban youth. With a little bit of nudge and lots of motivated efforts from the government as well as other stakeholders, there is still hope to inspire Indian consumers to turn the EV way.

4.What are the strategies that you have adopted for the Indian market?

We have launched and designed products keeping the Indian market in mind; all our products are crafted as per the market demand, one of the biggest examples would be our recent product Nyx which is a multi-purpose use vehicle, which can be used for travelling as well as business purposes. Our latest product incorporated with lithium ion technology which is used in bikes to keep them equal to the petrol bikes in terms of speed. This is going to be the revolutionary step to our world and ecosystem because of the high speed without effecting the environment. Lithium Ion technology is best in this segment of electric 2 wheelers and also best for the expansion of electric 2 wheeler markets realistically, however, a marked growth can be attained if focused efforts are made to enable infrastructure, provide financial incentive, create market awareness and provide manufacturing impetus to the stakeholders of the EV industry. All we need is government support and help to make India eco-friendly.

5.Where does your main focus lie, Tier II or Tier III cities and Why?

Our main focus lies in both Tier II and Tier III cities, they have the need for EVS in travelling intercity, the prominent users of EVs in tier II and tier III cities are women, students and senior citizens. Our Key Markets: Delhi, Punjab, Maharashtra, Gujarat, UP, Karnataka, Tamil Nadu, Kerala, Andhra Pradesh, Haryana, Uttarakhand, WB.

9.Please share your retail presence with us?

We follow exclusive dealership model for Hero Electric, all our dealers sell exclusive Hero Electric products, spare parts and merchandised. We have exclusive dealers of Hero Electric all across India; we are currently associated with more 300 dealers selling Hero Electric products in their exclusive stores.

Our retail presence is spread across India; we have stores in strategic markets and are expanding. In terms of the domestic market, our tie-ups with e-commerce platforms such as Snap deal have had a positive impact on our sales; 25% of the total sales are today being generated from online platforms. We have also partnered with other players such as Shop Clues, Homeshop18 and Rediff.com in a hope to leverage their huge customer base.

10. Please share the training and support you will offer to your distributor/dealer?

A: We provide support/ benefits to our dealers like Mega Service camp and discounts on spare parts. In Training, we are providing (Petrol) two wheelers technicians training on how repair EVS during emergency. Also we maintain a calendar accordingly we provide training twice a year to all our dealers.

Related: Why educational institutes should not run as charitable trusts

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