How Hero MotoCorp plans to keep Honda in the rear view mirror

Hero MotoCorp Ltd, India’s largest two-wheeler maker, is betting on a stronger presence in premium motorcycles, scooters and electric vehicles (EVs) to defend and expand its leadership position in the domestic market.

The company plans to launch at least two to three new premium models in FY27 as part of a broader strategy to strengthen its portfolio in segments that are growing faster than the traditional commuter motorcycle market.

“In FY27, you should see at least 2-3 more premium models getting launched,” Hero MotoCorp CEO Harshavardhan Chitale told Business Today in an interview.

The gap between Hero MotoCorp and its rival Honda Motorcycle & Scooter India has narrowed in recent years as changing consumer preferences favoured scooters, a segment where the Hero had historically been under-represented.

“Part of the reason why our lead narrowed was due to a trend towards different kinds of two-wheelers that were becoming more prominent. For example, scooters grew far more rapidly than motorcycles due to urbanization. There we were under-represented,” Chitale said.

To address the challenge, Hero MotoCorp has expanded its scooter lineup over the past few years. The company now offers a complete scooter portfolio comprising the Pleasure, Destiny and Xoom internal combustion engine (ICE) models, alongside a range of electric scooters under the VIDA brand.

“We now have a full product basket and with that, we actually gained significant market share in the last two quarters. With this, we were able to see that the gap not only stopped narrowing but also expanded a little bit. If we want to expand it further, it will be on the strength of scooters and a stronger premium and EV play,” Chitale explained.

To support its ambitions, Hero MotoCorp is ramping up production capacity. The company plans to double its ICE scooter manufacturing capacity and more than double its EV production capacity. It has earmarked capital expenditure of ₹1,500 crore for FY27 to fund the expansion.

Although Hero MotoCorp entered the electric vehicle market later than several rivals, it has been closing the gap quickly. Its electric two-wheeler sales surged nearly threefold year-on-year to 144,000 units in FY26. In the ongoing financial year, the company has overtaken early EV frontrunner Ola Electric, led by Bhavish Aggarwal, in sales volumes to secure the fourth position in the market.

“In electric vehicles, we continue to expect high growth in the next couple of years. That’s why the capacity expansion is planned. We do expect multiple different product introductions for different segments. We do expect to also have a range of motorcycles,” said Chitale.

Hero MotoCorp is also banking on its reputation for fuel-efficient products to drive demand. “In every category of two-wheelers, we are the fuel efficiency leader. When fuel efficiency becomes important, we should see benefits,” Chitale said.

Despite concerns around commodity inflation and broader economic uncertainties, the company reported a strong start to the current quarter. While the industry is expected to grow at a high single-digit rate, Chitale believes Hero MotoCorp can outperform overall market growth.

Exports, which contribute about 6% to its total volumes, are another pillar of the company’s expansion strategy.

“We were late to party on exports. We were a joint venture (with Honda). Our own R&D and portfolio is 12 years old. Some of the other players had earlier presence in exports. Now, we are rapidly catching up,” said Chitale.

Hero MotoCorp’s exports have grown about 40% annually over the last two years, helping it gain market share in overseas markets as well as increase its share of India’s total two-wheeler exports.

“We are in 52 countries. We have a plant in Bangladesh and Columbia,” Chitale said. “You will see us continuing to expand our share in exports. A lot of our growth in exports is driven by our premium portfolio,” he added.