Hero Motocorp India: Hero MotoCorp consolidates leadership position in India’s two-wheeler market in October

As per data available on the Vahan portal of the Ministry of Road, Transport & Highways, Hero MotoCorp had a 34.6% share in retail sales in October, up 8.7% percentage points compared with the previous month’s 25.9%.

While Hero MotoCorp’s market share increased sequentially in the past month, all its major rivals posted a decline, according to the data. Honda Motorcycle & Scooter India and TVS Motor Co closed the month with market shares of 27.4% and 15.7%, respectively.

While Hero MotoCorp had sold more vehicles than competitors for the first half of fiscal 2023, former partner Honda Motor’s local two-wheeler subsidiary retailed more units in September.

Multiple Hero MotoCorp dealers ET spoke with said they witnessed strong customer demand during the 32-day festive period (which commenced with the Navratra and ended with Bhai Dooj on October 26, two days after Diwali), which helped boost sales, especially for entry-level motorcycles. Sales of entry-level motorcycles — which comprise a major proportion of overall volume at Hero MotoCorp — have been under pressure in the last three years due to a rise in acquisition cost after the transition to BS-VI emission standard.

With healthy festive sales indicating an improved customer propensity to spend, dealers are upbeat about continuing the sales momentum in the remaining part of the fiscal year.

“We saw healthy double-digit growth over last year. We have not only strengthened our leadership in the 100cc deluxe segment but generated additional volumes through our new Xtec range of products,” said Nandish Prajapati of Sarthi Motors at Palanpur in Gujarat. “Good festive momentum has helped bring down inventories to the desired level as well. We should be able to carry this momentum for the balance period of the financial year.”

Hero MotoCorp chief financial officer Niranjan Gupta said during the fiscal second-quarter earnings call on Friday that the company’s inventory was at the lower end of the average stock levels usually maintained in the channel. “Our inventories are at the lowest, post festive. We maintain four to six weeks, so it is down to actually the lowest end of the spectrum,” he said.

According to Hero dealers, much of the turnaround last month was largely driven by the strong performance of its popular models including the 100cc Splendor+, 125cc Glamour and Super Splendor and the XPulse range in the premium segment. It also witnessed strong customer preference for the Destini scooters.

Ashfaque Alam, who owns Unique Hero at Madhepura and Anas Hero at Supoul in Bihar, said he saw good traction in the premium motorcycle (125 cc) and scooter segments. Bharat Saneja of Surya Autocorp in Jaipur said the Rajasthan market witnessed very high growth in the festive period.

“The 125cc segment is a very interesting one, as it sees growth from upgrades from the 100-110cc as well as downgrades from the 150-160cc segments,” said Ranjivjit Singh, chief growth officer at Hero MotoCorp, during an analyst call. The Super Splendor has done very well in the key markets that it operates in, he had said.

Even as sales have recovered in the past few months, the domestic two-wheeler market continued to struggle in the face of accelerating inflation and hardening of interest rates. But, with demand now kicking in on account of the marriage season — two-wheelers are often gifted to the newly married — the industry is hoping for the momentum from the festive period to continue in the coming months.