The festive season will be crucial for India’s top two two-wheeler makers as the duo, accounting for more than half of the market, plan to intensify their slugfest and go all out to chase volumes and market share with aggressive promotional schemes in the world’s largest market.
Hero MotoCorp aims to retail 1.5 million two-wheelers, up 10% year-on-year (YoY) during the 32-day period which begins with Navratri on 3 October. This is equivalent to nearly three months of sales. Honda Motorcycle and Scooter India (HMSI) plans to sell 15-20% more than in 2023 – a year that was marked by supply shortages.
To be sure, the priorities for each are different but the goalposts remain the same. For Honda, which overtook Hero in wholesale volumes in the first five months of this fiscal, it would be about covering more ground and cementing its leadership position; for Hero, it would be about clawing back market share it ceded reclaiming the numero uno position.
Spokespersons at Hero and Honda declined to respond to ET’s queries.
“By the end of this year (fiscal), we will regain the share and be the market leader again,” Hero, the maker of Splendor and Passion models, said at a dealer conference in Barcelona, Spain earlier this week. The company is pinning hopes for a comeback on the better-than-expected response to the Xtreme 125 cc motorcycle model, and an underlying recovery in the rural markets, it said.
Both Hero and Honda are expected to launch aggressive consumer schemes ahead of Navratri to lure buyers. Honda has already announced an extended warranty scheme worth INR 3,500, equivalent to 4% of the ex-showroom price for its 100 cc Shine motorcycle model and its Activa range of scooters from September 1 till the month-end. It would unveil more schemes next month, according to dealers.
“Unlike last year when there was a product shortage, this year, we are entering the festive season fully prepared,” said an HMSI dealer. But Hero MotoCorp dealers aren’t that upbeat. “The September retail (as per Vahan) looks weaker than the past months. Not sure if the recovery in market share and meeting the festive season target will be easy,” said one of the dealers.
Hero retailed 247,000 units compared to Honda’s 293,000 units, this month till September 26, as per vehicle registration data from the government’s Vahan portal.
Year-to-date (from April 1 till September 24) Hero’s market share fell to 29.6% from 32.6% over a year earlier. HMSI, on the other hand, saw its market share climb to 27.1% from 23.6% in the same period, as per an Elara Securities research note based on Vahan data.
HMSI’s gains over Hero have come largely on the back of the former’s entry into the high-volume 100 cc segment, traditionally a stronghold of Hero.
The sharp contraction in Hero’s market share despite the success of Xtreme 125 points to significant erosion in its commuter motorcycle sales, wrote Pramod Kumar and Nikunj Mandowara, analysts from UBS Securities in a research note. “Competition (Honda Shine, Bajaj Freedom), and an increased shift to scooters and EVs in smaller towns, are further eroding Hero’s core customer base, even as the market appears to be pricing in a recovery in commuter motorcycles,” they wrote.
The international brokerage downgraded the stock to ‘sell’ citing multiple concerns at the two-wheeler major.
To be sure, after a fast-paced growth of last year which came on the back of a high base of the previous year, some of the other two-wheeler makers have also faced declines in market shares though the drop has been marginal for them.
Bajaj Auto’s market share fell by a percentage point to 11.1% and Royal Enfield’s points to 4.5% from 5% in the same period. However, TVS Motor’s rose to 17.4% from 17.2%.
