A Comparative Study of Honda Motorcycle & Scooter India and Hero MotoCorp.
29 Jun 2025 | 1520 Views | By Ashutosh Radhey Shyam
Honda Motorcycle and Scooter India (HMSI), the wholly owned subsidiary of Japan’s Honda Motor Co., is increasingly validating its decision to dissolve its erstwhile joint venture with Hero MotoCorp—India’s largest two-wheeler manufacturer and the producer of the iconic Splendor. The disparity in total sales volumes (domestic and export) between Hero ...
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Honda Motorcycle and Scooter India (HMSI), the wholly owned subsidiary of Japan’s Honda Motor Co., is increasingly validating its decision to dissolve its erstwhile joint venture with Hero MotoCorp—India’s largest two-wheeler manufacturer and the producer of the iconic Splendor. The disparity in total sales volumes (domestic and export) between Hero MotoCorp and HMSI has contracted significantly.
From a staggering gap of 1.376 million units in FY20—when Hero MotoCorp sold 5.899 million units and HMSI 4.523 million—the difference narrowed to a mere 67,822 units in FY25. Over the past decade, HMSI’s total sales have grown at an average annual rate of 3%, culminating in 5.3 million units in FY25. By contrast, Hero MotoCorp’s volumes contracted by 1% over the same period.
The motorcycle segment, particularly the 75–125cc category, has been the primary engine of HMSI’s volume growth. In FY25, HMSI’s share in this category climbed to 18.4%, up from 12.3% five years ago. Conversely, Hero MotoCorp saw its share in this crucial segment decline by 800 basis points to 46.2%. Notably, the 75–125cc segment accounts for nearly 72% of the total domestic motorcycle market.
What is particularly striking is HMSI’s rapid inroads into the premium motorcycle category (>125cc), which grew by 34.71% to 466,332 units in FY25. This was spearheaded by the Unicorn 150, which recorded sales of 309,226 units and captured a 10% share of the premium market. HMSI’s overall share in this segment rose to 15.7%, a gain of 380 basis points over five years.
Financial Metrics
The convergence in sales volumes is mirrored in financial performance. HMSI’s revenue climbed to Rs 31,945 crore ($3.8 billion) in FY24, amounting to 85% of Hero MotoCorp’s revenue of Rs 37,455 crore. Back in 2019, HMSI’s revenue was only 77% of Hero MotoCorp’s, marking a gain of 800 basis points in relative revenue share.
The topline growth has resulted in an operating margin expansion of nearly 380 basis points. HMSI’s operating margin reached 14.58%—55 basis points higher than Hero’s—placing it among the top three most profitable two-wheeler manufacturers in India, behind Royal Enfield and Bajaj Auto, which posted operating margins of 27% and 19%, respectively. In per-unit terms, HMSI’s operating profit stood at Rs 9,516 per vehicle in FY24, surpassing Hero MotoCorp’s figure by Rs 167. Net profit rose to Rs 2,705 crore, translating to an 8.72% CAGR over the same period. Hero MotoCorp, in contrast, registered a slower profit growth rate of 3.80%, culminating in Rs 4,079 crore.
From Scooters to Motorcycles
HMSI’s resurgence is underpinned by a strategic pivot from a scooter-centric portfolio to a balanced focus on motorcycles. Initially, the company had concentrated heavily on scooters, especially in South India where the format enjoys greater acceptance. However, realizing the limitations of further penetration in North and Central India—and the impending threat from electric vehicles (EVs)—HMSI recalibrated its approach. Between FY15 and FY25, HMSI’s domestic scooter volume grew by a modest 1.28% annually, peaking at 3.8 million units in FY18, only to contract by 7% between FY19 and FY24.
Hero MotoCorp’s scooter business fared even worse, with volumes shrinking by 6% annually over the past decade. In FY25, the ICE scooter segment rebounded with a 13% annual growth, reaching 6.6 million units. HMSI’s scooter volumes too rose 14% to 3.15 million. Hero’s scooter market share plummeted from 16.7% in FY15 to 5.7% in FY25, while HMSI’s share dropped from 55.5% to 41.5% over the same period.
Export and EVs
To counter domestic saturation, HMSI has ramped up its export activities, especially in scooters. Between FY15 and FY25, its scooter exports (75–125cc) grew at an annual rate of 16%, reaching 311,975 units. Today, HMSI accounts for nearly half of India’s scooter exports. Hero MotoCorp, by contrast, exported between 10,000 and 30,000 scooters annually over the last three years. HMSI operates four manufacturing facilities in India with a combined annual capacity of 7 million units.
Hero MotoCorp maintains six manufacturing plants across India with a cumulative capacity of 9.3 million units. The next frontier for both manufacturers will be the EV segment. Both HMSI and Hero MotoCorp have accelerated their EV plans. HMSI projects that one-third of its sales will come from EVs by 2030, and has already launched two electric scooters—the Activa e and the QC1. Hero MotoCorp, on the other hand, has introduced Vida and plans to roll out a more affordable variant in the coming months