Hero MotoCorp now expects India's two-wheeler industry to grow at close to double digits in the current financial year, citing sustained demand across internal combustion engine and electric vehicles, even as a high base from last year's GST-led recovery is likely to moderate growth in the second half.
The strong momentum seen in the April-June quarter has continued into the current quarter, with July retail sales remaining robust, giving it confidence that the industry will maintain healthy growth through the year despite a tougher comparison base in the second half.
"Two-wheeler industry, in quarter one, the total industry, ICE plus EV put together, grew about 14% in quarter one. We see a similar trajectory for quarter two, looking at how July has started," Hero MotoCorp CEO Harshavardhan Chitale told investors on Friday.
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"The second half does have a base effect because of a big jump that happened in sales in H2 last year post-GST. Hence, from a base perspective, the year-on-year growth will be lower, but given the current momentum, we still expect positive growth in H2, and our plans right now are for the full year to approach double-digit industry growth," he said.
Earlier in May, the company had said that it expects the industry to post high single-digit growth in FY27.
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India's two-wheeler market entered the current financial year after a strong recovery in FY26, when industry volumes rose 26.4% year on year to 21.71 million units. Demand received a boost following the GST reduction announced midway through last year, helping volumes surpass pre-pandemic levels. Motorcycle sales grew 6.6% to 13.06 million units, while scooter volumes rose 18.5% to 8.12 million units.
Chitale said the demand environment continues to remain favourable across both ICE and electric vehicles. "Starting first with the underlying demand trend in Q1 FY27... two-wheeler industry volumes grew 14% year on year in terms of Vahan, or retail sales, of which 11% was growth in ICE and 67% was in EV," he said. "So, both ICE and EV had strong demand momentum in Q1. This growth was broad-based, supported by improved affordability post-GST rate cuts, as well as healthy urban and rural demand and continued acceleration in EV adoption."
He added that "this strong demand momentum has continued in Q2", with July recording 28% year-on-year retail growth. The management noted that the entry-level motorcycle segment continues to expand, although higher-capacity motorcycles are growing at a faster pace.
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"The 100cc category is also growing, but other ranges, 125cc and above, are growing faster," Chitale said, adding that the affordability gains from the GST cut continue to support first-time buyers entering the market.
Hero MotoCorp remains optimistic about the electric vehicle segment, where it reported a 151% increase in wholesale volumes during the June quarter. The company said demand continues to outpace supply, with minimal inventory at dealerships.
"We have pretty much no channel inventory. You know, it's two to three days, depending on the region. So whatever we are supplying and shipping is actually retailed immediately," Chitale said.
The company recently expanded its Vida electric scooter lineup with the VX2 Plus 4.4 kWh and VX2 Go 3.1 kWh variants and said both are expected to contribute meaningfully to volumes as they gain traction.