Electric two-wheelers could help dealers retain more customers even as they reduce the need for traditional servicing, according to Hero MotoCorp’s chief business officer, Ashutosh Varma.
- EVs are currently complementing, rather than replacing, ICE two-wheelers, says Hero MotoCorp
- EV service retention could reach 85-90 percent
- Software-based services could create new revenue opportunities for dealers
EVs could improve service retention
Dealer revenue set to evolve
Speaking at a FADA conclave, Varma said the current growth of the ICE two-wheeler market suggests EVs are complementing conventional motorcycles and scooters rather than replacing them.
“The way the ICE business seems to be growing, it doesn't seem like EVs are substituting ICE sales. It's just like complementing ICE sales,” he said.
One of the potential benefits for dealers could be higher customer retention. Varma said average retention in the ICE business is around 60 percent, while EVs could push this considerably higher.
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“In EVs it nudges us to move even further, possibly 85-90 percent,” he said.
While EVs have fewer mechanical components and generally require less routine maintenance than ICE vehicles, a higher proportion of EV owners returning to authorised workshops could help offset some of the reduction in conventional service and parts revenue.
Varma also pointed to software as another potential source of income for dealers. Manufacturers are increasingly offering modular, paid software and technology features, giving dealerships an opportunity to earn from services beyond traditional workshop jobs.
The revenue mix for dealerships is therefore likely to change as EVs become more common, rather than simply declining because vehicles need less mechanical servicing.
“The nature of revenues as you go forward will continue to evolve,” Varma said. “There are new avenues that will continue to emerge and EVs is an excellent example.”
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