Honda Gains Market Shares Across Two-Wheeler Segments; Bajaj, TVS, Hero Lose Out – Story In Charts

The Indian two-wheeler sales have been onward and upward in this fiscal year of 2025 and from April to August overall sales have grown 12.7% versus just 2% growth reported by car makers. A lot of this growth has also been led by scooters on the back of new launches and higher customer acceptance. But a key company that has benefitted across segments of scooters, 100-250-CC motorbikes segment has been Honda. This has also negatively impacted all listed two wheeler players like TVS Motor, Bajaj Auto Ltd. and Hero MotoCorp Ltd..

The strong sales trend witnessed by two-wheelers have also transpired into strong return profile in the last 1 and 6 months for most companies. While all two-wheeler makers like TVS Motor, Bajaj Auto, Hero MotoCorp and Eicher are up 29-43% over the last 6 months, we have seen renewed interest especially in Hero MotoCorp and Bajaj Auto over the past month. Just in the past 1 month, Bajaj Auto has moved up by 20%, very close to the 12,000 rupee share mark while Hero MotoCorp has given 16% returns in the same timeframe.

Hero MotoCorp sales trends over the past few years suggest most sales happening in the 2nd half of the fiscal year, due to its portfolio being more skewed towards entry level motorcycles. These are more profound during and around the festive period. This also coincides with the post-harvest kharif season.

On an overall basis Honda Scooters and Motorcycles India Ltd. has seen their market share go up by 465 basis points at 29.8%. This is attributed to launches this year but also majorly solving their supply chain issues faced last year. This started off late 2022 and had persisted in the first half of calendar year 2023. They have dethroned Hero MotoCorp in terms of volumes as well for the period of April-August leading to Hero's market share to come down to 29.2%. It’s also visible that other players like Bajaj and TVS have also lost market share to Honda. But most of this seems to be behind now and that’s reflected in its sales across segments. Let’s deep dive into segmental performance.

The entry level 100-CC segment has been synonymous with the Hero Splendor. Over the past few years Bajaj, TVS and Honda have been trying to compete better in this segment but haven’t been able to do so. Hero has cornered almost 80% of the market and the rest has been split between Bajaj, TVS and Honda. Currently Honda has managed to claw back some of the market share it lost to its former players and that’s visible in the market share numbers.

The Honda Shine has been the brand they are banking on for entry level motorcycles. It will be key to see how Bajaj and TVS responds. Bajaj Auto has been vocal about the profitability of this segment not being enough and this has also led to platers moving to 125-CC models with larger focus.

The 125-CC segment has been the most promising segment in the value segment over the past couple of years. While there are a few strategies has been employed by companies to appeal to the consumer, the  key strategy visible was to address the younger generation – a trend visible with launches of the TVS Raider and Bajaj Pulsar 125. Hero and Honda largely retained their strategy to have ‘commuter’ models but Hero has recently launched the Xtreme 125 – a more nuanced model appealing to younger audience.

Honda operates the Shine 125 and SP 125 and appeals to the commuter bike community. These have specific applications for intercity travel and Honda has been able to capture this meaningfully. It lost market share last year due to supply chain issues but has come back meaningfully.

With Pulsar and Raider raging last year, it did seem like the segment was changing with preference towards younger crowd and with more feature rich models but Honda’s comeback and Raider’s underperformance lately suggests its going back to being a commuter heavy space.

This segment has largely been dominated by these two players with TVS Apache and Bajaj Pulsar NS 160 being top 2 players. While TVS has been able to gain some share both Bajaj and Yamaha have lost share, especially the latter losing a whopping 467 basis points share.

Yamaha’s FZ has been instrumental to dominate in 160-CC and that seem to be showing some fatigue. This also has led to Honda’s gain. Honda’s Unicorn in this space has been a stronghold for a while now and that seems to get in the 3^rd spot. This segment is split between these four players and the only way to gain market share is to ensure other players lose it, and that seems to be playing out with Honda gaining meaningfully.

Royal Enfield is in peculiar territory with disappointing volume data, something which hasn’t been the case for the legacy brand. While all two wheeler players have reported growth of 8-10%, Royal Enfield has actually degrown in sales by 3%. This is despite launches by the company such as the Hunter 350 which is the cheapest offering to enthuse newer customers especially in their 20s.

The New Classic 350 has also not received the most promising response, but the company would be hoping for better customer orders going ahead. Bajaj Auto has been the biggest beneficiary with Pulsar 400 as well as launching the Triumph brand in India. TVS has been the most disappointing with only the RR and RTR 310 and no new brand launched post that. Hero has tied up with bringing their Harley Davidson brand back in India but is too reliant on the same. They will need new nameplates as well to sustain their market share gain.

While the stocks have gone up, especially in the last 6 months the valuations aren’t totally out of whack! Within the two wheeler space, TVS is the most expensive in term of forward price to earning ratio trading at roughly 40x as per Bloomberg and NDTV Profit analysis. TVS is the only company offering triple benefits of having a meaningful presence across motorcycles, scooters and electric scooters now.

Bajaj Auto’s the next expensive stock and with exports markets of Africa suffering, the company has found some solace in Latin America. For Bajaj, Africa used to account for 50% of its exports sales and due to currency issues in these countries, exports fell 10% last year. With Chetak EV now in gathering pace and garnering almost 20% of Two Wheeler EV Market share and premium portfolio performing better than TVS these are the most preferred two wheelers.  

Hero and Eicher had their fair share of problem with delayed launches and lower sales growth but the former seems to have found a way now. With rural showing better signs, a recovery will propel the stock onward and upward since valuations are also on its side. Analyst also are most bullish on Hero MotoCorp with 67% covering the stock have a 'Buy' call.

Eicher will have to find a way to grow its 350cc portfolio. They have been struggling and haven’t been able to cross their sales of 2019, the previous life high of the industry. Analyst also are most bearish on prospects with only 4 of 10 analyst recommending a 'Buy'. This is also led by the strong price upmove for Eicher Motors despite weaker sales performance.