28% GST on two-wheelers is not a justified rate: Pawan Munjal, MD, Hero MotoCorp

Pawan Munjal, Managing Director, Hero MotoCorp, talks about surpassing the cumulative production milestone of 100 million (10 crores) units, budget expectations, the outlook for 2021 and premium bike segment market among others during an exclusive interview with Swati Khandelwal, Zee Business. Edited Excerpts:

Q: Congratulations on crossing 100 million two-wheeler milestone, on January 21, 2021, and setting a new world record. What would you like to say about this milestone to shareholders and investors? Also, going forward, what is the outlook?

A: Truly, it is a momentous occasion, not just we but for the entire Hero Family, this is a creation of history. I believe, this also a proud and momentous occasion for the entire nation for every Indian. What Can I say about how I feel? I feel absolutely top of the world. I feel very emotional right now. I have many thoughts going on in my mind from the very start of this journey, until now, today, January 21, 2021, when we achieved this momentous and huge milestone of 100 million motorcycles.

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Q: Budget is on the anvil, and there are reports that scrappage policy is about to be announced. How do you see this move and what expectations do you have from this budget for the two-wheeler industry?

A: Yes, the budget is around the corner. Every year, the government announces its annual budget, its receipts, its expenditure and the investments. For me, the budget is just one more event for the government, we all make it out like a huge event. Having said that, the scrappage policy announcement should be very good for the industry. Anything that the government will do to further boost the industry is definitely going to help the economy. I have to once again talk about the GST rate for the two-wheeler that 28%. It is a common man product, a large part of the sale of two-wheeler are for a common person, so 28% is not a justified rate.

Q: How do you see the overall demand structure panning out as rural is showing good strength. What is your overview for Hero MotoCorp in 2021?

A: With the recent support that the government has extended to the rural sectors, whether through the stimulus packages or through various other schemes for the agri-sector that all has clearly helped the motorcycle industry. We have seen a lot of growth coming from the rural markets during many-many months of the pandemic. Going forward, I believe, things will get better. The sentiment is changing, is getting positive, the situation is still there. Having said that, the numbers of positive COVID-19 cases have been coming down, vaccines have been announced and vaccination has started. I am sure, all of this will change for the betterment.

Q: You have a focus on premium bike segment market and recently you have also announced a tie-up with Harley-Davidson. Going forward, what kind of launches and plans do you have product-wise, segment-wise and premium focus for 2021?

A: At Hero MotoCorp you have seen that there is a lot of focus on premiumization from the last few years. In recent time, we have introduced many premium products, whether it is Xpulse in the 200 CC segment. A few hours back, Hero Xtreme 160R was introduced. Going forward, we will have a focus on the premium segment and will continue launching new products in the segment.