Hero Motocorp, the largest two-wheeler manufacturer in the country, expects demand in the entry segment, the 100-110cc commuter bikes, will come back in the next few years.

Speaking at Hero World 2024, where the company launched the Maverik, the crossbadged Harley X440, Niranjan Gupta, chief executive officer, Hero MotoCorp, said: "Hero is the market leader in the 100-110cc segment. The Indian market is still not fully penetrated. There are households without any vehicle and want to purchase one."

He said sales in the entry segment were hit by multiple factors: inflation, BS VI prices, the loss of jobs and income because of Covid as well as a drop in confidence levels on account of higher health costs caused by the pandemic.

"What we see now is that the consumer confidence index going up, we saw green shoots in the festive season."

The government's capex programme should result in income and employment in the long term. The hospitality industry is reviving.

"So this segment will come back."

Asked if the segment is impacted by high interest rates, Gupta said: "About 60 per cent of the vehicles in this segment are financed. Interest rates are already high in rural areas because of delinquency and write-offs."

"The weighted average interest rate in rural areas is 20 per cent. There is scope to bring that down. With fintech, digital payments, where you can track the vehicles, you can do away with write-offs. If from 21 per cent, it comes down to 14 per cent that will be a good gain."

The company has entered the upper premium segment, with the cross-badged Harley product HD X440, christened the Maverik.