Two-wheeler manufacturers Royal Enfield, Bajaj Auto, and Hero MotoCorp have reported record revenue from the sale of branded genuine parts, accessories, and merchandise in FY24. This surge in revenue is attributed to a more organized market for these items and a growing preference among buyers for branded spares over non-branded ones. Additionally, an enhanced product mix, which includes a higher contribution of premium models and an expanded product portfolio in the aftermarket segment, has contributed to increased revenue and profitability.
Hero MotoCorp's Performance and Strategy
Hero MotoCorp, the maker of popular models like the Xpulse and Splendor, has seen a significant increase in revenue from spare parts and accessories. Key highlights include:
Revenue Growth: The company reported a nearly 80% increase in revenue from spare parts and accessories over the past five years, reaching a record Rs 5,087 crore in FY24, up from Rs 2,836 crore in FY19.
Revenue Share: The share of this sub-segment in the company’s total revenue rose to 13.6% in FY24 from 8.7% in FY19.
Expansion Plans: Encouraged by the growth potential, Hero MotoCorp plans to expand its Global Parts Centre to further capitalize on this segment.
Hero MotoCorp's CEO, Niranjan Kumar Gupta, highlighted that the company’s parts, accessories, and merchandise (PAM) business has grown in double digits over the last three to four years, effectively doubling the revenue size of the PAM business. Gupta also noted that the addition of premium motorcycles to the company's lineup will enhance the business scope for merchandise and premium parts. The inclusion of tyre and bike care products has also contributed to revenue growth in this segment.
