Interview Amid Gupta, CEO and Managing Director, Hero Motors
The Indian car market recently became the third largest worldwide and still offers excellent growth prospects. We asked Amid Gupta, CEO and Managing Director at Hero Motors, about the unique features of the Indian market and the company’s plans for Europe.
Many people know Hero Motors primarily for its two-wheelers. What are your activities in the automotive field?
Our brand is widely recognized as a leading player in India for two-wheelers and bicycles. Over the past few decades, our group has diversified into automotive components. Hero Motors‘ core focus is on automotive components, particularly powertrain solutions, with business activities in Asia, Europe, and the US. With facilities in India, Thailand, and the UK, we manufacture complete transmissions for motorcycles and performance cars. With recent investments, we can deliver comprehensive value chain solutions, including design, validation, prototyping, and serial manufacturing of transmission components and systems.
What are Hero’s plans for more automotive business in Europe?
We have maintained a strong presence in Europe for many years, with some of our relationships with OEMs spanning 10 to 15 years. Our customers trust our technology, quality, and collaborative approach, which we continue to build upon. In addition to our UK office, we plan to open a new office in Frankfurt to enhance synergies with our European customers. Moreover, we are actively exploring opportunities to establish a new facility or acquire an existing one in Europe to support final assembly operations for EV components, such as transmissions, motors, and inverters, closer to European customer locations.
You gave interesting insights into the Indian market at the CTI Symposium Berlin. To what extent will passenger vehicles replace two-wheelers on a larger scale?
India’s market is unique, with 60 % of the population living in rural areas and 40 % in metropolitan regions. While people in cities aspire to own cars, many in rural areas face financial challenges that make car ownership difficult. However, with a population of 1.43 billion, even the 40 % urban segment represents a significant opportunity for the automotive market. Currently, less than 3 % of the population owns a car, and last year, two-wheeler sales were roughly four times higher than car sales. For many Indian customers, two-wheelers serve as affordable, practical commuting vehicles, so the two-wheeler market remains significant. There’s substantial growth potential for both the two-wheeler and passenger vehicle segments as both continue to expand.
We remember the Tata Nano, which failed to meet expectations at the time. How do today’s potential car buyers in India differ from people in Europe or North America in terms of expectations?
The Indian car market is not focused on the super-premium segment. Combined sales of premium brands like BMW, Volvo, Volkswagen, and Mercedes total only about 40,000 cars annually, making up roughly 1 % of the market. It’s important to note that premium cars in India are taxed differently; for example, a BMW car that costs 100,000 Euros in Germany is much more expensive in India. Most Indian buyers aspire to buy mid-premium cars, typically priced between 12,000 and 20,000 Euros, and they seek cars with a full range of features. Within this price range, there is a growing preference for SUVs, driven partly by road conditions. As in other regions, SUVs are becoming increasingly popular among Indian consumers, forming 43 % of the market in 2023.
What role does electrification play in India, and what are the specific requirements compared to Europe?
The Indian government is actively promoting electrification, with a strong focus on encouraging the development of charging infrastructure and battery-swapping systems, which are gaining significant momentum. Major OEMs also align their strategies with this shift, making substantial investments in the electric vehicle space. Electrification is particularly well-suited for three- and two-wheelers in India, thanks to their lower range requirements and smaller battery sizes. However, plug-in hybrids are becoming increasingly popular for cars, as they alleviate range anxiety and offer a practical solution for drivers. Personally, I would choose a hybrid, as it reduces emissions while providing peace of mind, even in areas where charging infrastructure is limited. While mild hybrids remain familiar, the growing popularity of plug-in hybrids reflects increasing consumer recognition of their advantages.
How is the energy and charging infrastructure developing? Where will BEVs penetrate the market on a large scale?
India’s energy and charging infrastructure is developing, but it’s progressing more slowly than Europe or China. Currently, only 2 % of cars are electric, though this is expected to rise to 30% by 2030. The adoption of electric cars has been slower than for three-wheelers, which require less complex charging infrastructure. Electric three-wheelers currently make up 54% of the market, with projections showing they could reach 70% by 2030. For two-wheelers, 5 % are electric today, with expectations of 50 % by 2030.
Interview: Gernot Goppelt
