Japanese Giant Claims Top Spot in Rare Achievement as Market Dynamics Shift
07 Aug 2025 | 6329 Views | By Angitha Suresh
In a significant development for India's two-wheeler industry, Honda Motorcycle & Scooter India (HMSI) has overtaken Hero MotoCorp in monthly retail sales for July 2025, marking only the fourth time in history that the Japanese manufacturer has achieved this milestone, according to the latest Federation of Automobile Dealers Associations (FADA) ...
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In a significant development for India's two-wheeler industry, Honda Motorcycle & Scooter India (HMSI) has overtaken Hero MotoCorp in monthly retail sales for July 2025, marking only the fourth time in history that the Japanese manufacturer has achieved this milestone, according to the latest Federation of Automobile Dealers Associations (FADA) data.
According to official FADA retail data released on August 7, 2025, Honda sold 345,802 units in July 2025, edging past Hero MotoCorp's 339,548 units by a margin of 6,254 vehicles.
Honda captured 25.51% market share compared to Hero's 25.05%, in a month that saw overall two-wheeler retail sales decline by 6.48% year-on-year to 13,55,504 units.
Historic Context and Rarity of Achievement
This achievement is particularly noteworthy as historical data reveals Honda has overtaken Hero MotoCorp in monthly retail sales only a handful of times since their historic split in 2011.
Previous instances include September 2022, when Honda first broke Hero's dominance, and more recently in September 2024, when Honda outsold Hero by 62,537 units (333,927 vs 271,390 units).
The July 2025 victory, while narrower in margin, demonstrates Honda's growing consistency in challenging Hero's long-standing market leadership. Over the 19-month period from January 2024 to July 2025, Hero MotoCorp has maintained an overall sales advantage with approximately 7.98 million units compared to Honda's 7.01 million units, averaging 420,056 and 368,936 units per month respectively.
Rural Disruption May Have Favored Honda's Urban Strength
The shift in leadership appears to be significantly influenced by geographical market dynamics and weather-related disruptions that disproportionately affected Hero MotoCorp's rural strongholds.
Hero traditionally derives a substantial portion of its sales from rural markets in Northern, Central, and Western India, while Honda's strength lies in urban areas and South India.
FADA data reveals that rural two-wheeler sales were severely impacted in July, declining by 11.17% year-on-year compared to urban markets, which fell only 0.31%. As FADA President C S Vigneshwar noted, "crop-sowing activities and prolonged heavy rains dampened rural footfalls more sharply than urban demand," creating conditions that may have disproportionately affected Hero's core customer base.
The regional breakdown shows rural areas accounted for 54% of total two-wheeler sales in July 2025, but the sharp rural decline of over 11% would have hit Hero harder given its traditional dominance in these markets.
Meanwhile, Honda's urban-centric portfolio and stronger presence in South India – regions that showed more resilience – likely helped cushion the overall impact.
Strategic Product Push Behind Success
Honda's latest retail victory comes on the back of an aggressive product offensive, particularly in the commuter segment. The company recently launched the updated 2025 Honda Shine 125, equipped with OBD2B compliance, a fully digital instrument cluster, USB Type-C charging port, and a wider 90mm rear tire for enhanced stability.
Priced starting at Rs 84,493 (ex-showroom Delhi), the new Shine 125 continues to be powered by a 123.94cc PGM-Fi engine delivering 10.7PS and 11Nm of torque.
Additionally, Honda has expanded its portfolio with the Shine 100 DX variant and the updated SP 125, both targeting the high-volume commuter segment that forms the backbone of India's two-wheeler market. The Shine series has been particularly crucial for Honda's growth strategy in recent months.
Market Dynamics and Segment Performance
According to FADA President C S Vigneshwar, the July 2025 retail decline was attributed to "crop-sowing activities and prolonged heavy rains" that dampened rural footfalls more sharply than urban demand.
Despite this challenging environment, Honda managed to outperform, with TVS Motor Company securing third place with 269,677 units (19.89% market share) and Bajaj Auto in fourth with 138,381 units (10.21% market share).
The geographical impact becomes clearer when examining the broader trend: while urban two-wheeler sales in July showed remarkable resilience with only a marginal 0.31% year-on-year decline, rural sales plummeted by 11.17%.
This divergence likely played into Honda's hands, given its stronger urban presence and scooter portfolio that appeals more to city customers.
The two-wheeler segment saw a 6.48% YoY decline and a 6.28% MoM drop in July 2025, with dealers remaining confident of a post-monsoon uptick as several purchase decisions were deferred to August ahead of the festive season.
Scooter Dominance Remains Key Differentiator
While Hero MotoCorp has traditionally dominated the motorcycle segment with its fuel-efficient 100cc commuters that appeal strongly to rural buyers, Honda's strength in the scooter market continues to be a game-changer.
The Activa family remains the cornerstone of Honda's scooter portfolio, helping the company maintain a strong position in urban markets where scooter demand remains robust.
In the broader market context, Hero MotoCorp's market share has been under pressure, reducing from 40% in FY2015 to around 30% in FY2024, while Honda has maintained its market share at around 25-28% during the same period, showing remarkable consistency despite intense competition.
Hero's Response and Year-to-Date Performance
Despite the July setback, Hero MotoCorp maintains its leadership in cumulative sales for the fiscal year. For the YTD FY'26 period (April-July 2025), the overall two-wheeler retail market grew by 2.37% to 61,62,619 units.
Hero continues to focus on product diversification, including its electric vehicle brand VIDA, and has been launching premium motorcycles like the Maverick 440 and Xtreme 250R to expand its portfolio beyond the commuter segment.
Hero's challenges stem partly from weak rural demand, traditionally its stronghold. The FADA data confirms that rural demand was more severely impacted than urban in July, with rural two-wheeler sales declining by 11.17% YoY compared to urban's 0.31% decline.
This geographical impact likely disproportionately affected Hero, given its stronger rural presence in Northern, Central, and Western India – regions that experienced significant monsoon disruption during the critical crop-sowing period.
Near-Term Outlook
Looking ahead, FADA remains cautiously optimistic with 63% of dealers forecasting growth for the July-September period. The convergence of major festivals including Rakhi, Janmashtami, Independence Day, and Ganesh Chaturthi, alongside targeted promotional schemes and aggressive rural engagement, is expected to drive incremental sales.
The monsoon outlook through September appears broadly supportive, with India projected to receive normal to above-normal rainfall (approximately 106% of the long-period average), which should bolster crop prospects and rural liquidity. However, external headwinds including export tariff volatility and localized weather shocks underscore the need for vigilant market management.
Significance for the Industry
The fact that Honda has now overtaken Hero MotoCorp in retail sales four times – with two instances occurring in the past year – signals a potential shift in market dynamics.
While Hero MotoCorp remains the overall market leader in cumulative terms, Honda's growing retail presence, especially in urban markets, and its consistent product updates suggest the competition for India's two-wheeler crown is intensifying.
The July 2025 results highlight how geographical concentration can create vulnerability. Hero's traditional strength in rural Northern, Central, and Western India became a weakness when monsoon disruption and crop-sowing activities severely impacted these markets. Conversely, Honda's urban focus and relatively stronger presence in South India provided some insulation from the rural downturn.
Industry experts note that with both companies implementing strategic initiatives – Hero focusing on inventory management and global expansion, while Honda pursues aggressive market share growth through product diversification – the battle for supremacy in the world's largest two-wheeler market promises to remain closely contested in the months ahead.
As the festive season approaches and rural demand shows signs of recovery following a favorable monsoon, both manufacturers are gearing up for what could be a defining period in their long-standing rivalry.
Honda's consistent investment in product updates, particularly in the Shine series, and its dominant scooter portfolio position it well for sustained growth, while Hero's vast dealer network and strong rural connect remain formidable advantages in the battle for market leadership – provided rural markets recover as expected in the post-monsoon period.