Hero MotoCorp vs Honda: FY26 sales gap, EV shift in 2026

Leadership fight sharpens as Honda closes in

Hero MotoCorp’s hold over India’s two-wheeler market faced renewed pressure as Honda Motorcycle & Scooter India (HMSI) continued to narrow the gap in volumes and market share. Industry tracking showed Honda overtaking Hero in monthly domestic despatches in February 2025, and the rivalry remained in focus even as FY26 numbers kept Hero ahead on a full-year basis. The period also highlighted a broader structural shift in the industry: electric two-wheeler registrations rose, penetration inched up, and legacy manufacturers regained ground versus newer EV-first brands.

The key tension for investors and industry watchers is not a single month’s leadership change, but the direction of travel. Honda’s growth has been strongest in scooters, while Hero’s strength remains commuter motorcycles. At the same time, the EV market is becoming more crowded, and the leaders are changing.

India’s two-wheeler demand shows steady recovery

Two-wheeler retail sales were reported at 21.42 million units during the year, up 13.4% year-on-year, indicating demand recovery across markets. Separately, dealer body data also pointed to growth in registrations in the prior year, with overall two-wheeler registrations rising 8% to 18,877,812 units, compared with 17,527,115 units in 2023-24.

The volume expansion matters because it reduces the need for share gains to deliver absolute growth. But it also raises the competitive bar. As the market grows, brands with broader portfolios and faster refresh cycles can translate demand into incremental share, particularly in scooters and EVs.

FY26: Hero stays ahead in domestic volumes

FY26 numbers in the provided data show Hero MotoCorp maintaining leadership in the domestic market despite stronger competition from HMSI.

Hero MotoCorp dispatched 6.07 million units in the domestic market in FY26, versus Honda’s domestic sales of about 5.75 million units. That left Hero with a lead of more than 300,000 units. On the retail front, Hero’s retail sales were 6.08 million units, while Honda’s retail sales were 5.36 million units, a gap of 721,000 units.

The data also noted that the gap between the two players, which more than halved to 655,000 units in FY25, increased in FY26. In dispatch terms, the gap widened slightly in FY26 compared with around 286,000 units in the previous year, pointing to some stabilisation for Hero after a period of pressure.

Why the Hero-Honda gap keeps moving

Hero’s leadership is closely linked to its dependence on the domestic market, which was described as the backbone of its position. Honda, in contrast, has a stronger export base. Even so, Honda has repeatedly demonstrated it can overtake Hero in individual months, which shapes market perception and signals the intensity of competition.

The rivalry has intensified over the past few years, with Honda steadily closing the gap through consistent growth, particularly in scooters. Hero’s entrenched position in commuter motorcycles has helped it defend leadership in the domestic market, but the competitive landscape has been challenging in recent financial years, including periods where Hero lost monthly leadership to Honda.

February 2025: Honda tops monthly domestic despatches

Monthly data showed HMSI overtook Hero MotoCorp to become the largest two-wheeler maker in domestic despatches in February 2025.

Honda reported despatches of 383,918 units in February, compared with Hero MotoCorp’s wholesales of 357,296 units. The same dataset noted that Honda had already outpaced Hero in monthly domestic sales during July and August of that financial year.

On a year-to-date basis from April 2024 to February 2025, Hero MotoCorp’s domestic dispatches totalled 5,101,672 units, while HMSI shipped 4,925,241 units. The gap narrowed to 176,431 units, compared with 890,000 units in the previous financial year.

Market share signals: Hero eases, Honda climbs

Market share data in the provided context showed Hero’s share of domestic wholesale volume at 28.6% during April-December 2024, down from 30.2%. Over the same period, Honda increased its share to 27.2% from 25.2%, narrowing the difference.

Separate dealer body (FADA) data for the last fiscal year also placed Hero at 5,445,251 units of retail sales with a market share of 28.84%, while Honda had retail sales of 4,789,283 units and a market share of 25.37%. TVS Motor Company was third with 3,301,781 units and a 17.49% market share.

EV market in FY26: registrations rise, leadership reshuffles

In electric mobility, two-wheeler registrations rose 22% year-on-year during FY26 to 1.40 million units. EV penetration increased to about 6.5% of total two-wheeler sales in FY26, up from 5.8% in the year-ago period.

The data described a clear shift in the electric two-wheeler market, with leadership moving back to established manufacturers. Traditional ICE OEMs were said to hold more than half of the electric two-wheeler market, while Ola Electric, which had been the market leader, fell to fifth place in sales.

EV leaders: TVS on top, Hero among fastest growers

TVS Motor emerged as the largest player in electric two-wheelers in FY26 with registrations of 340,758 units, up 43% year-on-year. Its market share rose to 24.3% from 20.7%.

Bajaj Auto was the second-largest with 288,866 units, up 25% year-on-year, and market share improving to 20.6% from 20.1%. Ather Energy and Hero MotoCorp were described as the fastest-growing players among the top six. Ather’s registrations rose to 238,461 units, up 82%, with market share expanding to 17% from 11.4%. Hero MotoCorp’s registrations almost tripled to 144,099 units, lifting its market share to 10.3% from 4.2%.

In contrast, Ola Electric’s registrations halved to 164,215 units, with market share falling sharply to 11.7% from 29.2%. Greaves Electric registered 61,641 units, up 51% year-on-year, and market share improving to 4.4%.

Key numbers at a glance

FY27 output targets: next pressure point

Industry sources indicated Honda is targeting production of about 6.79 million two-wheelers in FY27, while Hero MotoCorp plans output of around 6.92 million units, about 200,000 units higher than Honda.

Production targets do not automatically translate into retail leadership, but they act as a forward indicator of how aggressively companies are planning capacity, inventory, and product line-ups. The same context suggested production targets could also position TVS Motor to challenge Honda for the number two spot in India’s two-wheeler market.

Market impact and what investors will track

The data highlights two parallel contests: the fight for ICE leadership in a high-volume commuter and scooter market, and the reshuffling in electric two-wheelers as penetration rises from 5.8% to 6.5%. For Hero, defending domestic leadership rests on sustaining volumes in commuter motorcycles while building a larger presence in scooters and EVs. For Honda, narrowing the gap has been linked to consistent growth, particularly in scooters, along with ambitions to reach the top spot.

In EVs, the numbers show incumbents scaling up, with TVS and Bajaj posting large volumes and Hero showing rapid growth off a smaller base. The sharp decline in Ola Electric’s volumes and share underscores how quickly EV leadership can shift when competition intensifies.

Conclusion

FY26 kept Hero MotoCorp in the domestic lead over Honda on annual retail and dispatch volumes, but monthly swings and market share trends show Honda is still closing in. Meanwhile, EV registrations rose 22% to 1.40 million units and penetration increased to about 6.5%, with legacy OEMs taking a larger share of the segment. The next set of signals will come from how FY27 production targets convert into dispatches, retail sales, and market share outcomes.