Hero MotoCorp announces financial support to dealers amid lockdown
The country's largest two-wheeler maker Hero MotoCorp has come up with a financial package to support its dealers who have been facing liquidity crunch due to nationwide lockdown amid the coronavirus pandemic.
The package, announced by Hero MotoCorp Chairman Pawan Munjal at a digital Town Hall over video conference earlier this week, includes a revised pricing structure on new products, financial support towards the interest on dealer stocks and financing options from Hero FinCorp, the company's retail finance arm.
“We have revised the pricing structure that will enhance your profitability, and the new structure will be applicable on all dispatches post the lockdown. Additionally, I am also happy to announce financial support towards the interest on the dealer stock for the complete lockdown period of 41 days," Munjal said at the Town Hall.
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The event was attended by the company's dealers, sales and after sales staff and its senior leadership team. To support the dealers with liquidity for operating expenditure (OPEX), the two-wheeler major has come up with a solution with Hero FinCorp, which would disburse an amount in line with the respective dealer's wage and rental liabilities at a subsidised rate of interest.
Several company dealers confirmed the steps announced by the company to improve their liquidity position. Munjal has now addressed the company's dealers twice over video conference in less than a month since the lockdown was announced. In his first town hall held on March 28 Munjal had announced the company's support measures for the dealers to help them in liquidating the BS-IV stock and for manpower up-skilling at dealerships.
Hero MotoCorp' sales network includes over 6,000 touch points, comprising around 1000 dealers, service centres etc, across the country. Auto dealers of various companies are staring at huge losses as the lockdown has hampered retail sales and they are saddled with the large BS-IV inventory.
Already, Honda Motorcycle and Scooter India (HMSI) has come up with a slew of measures, including buyback of unsold BS-IV stock, in order to support its sales partners. The company has also released payments of around ₹1,700 crore to its suppliers, dealers and service providers.