On 22 March 2011, India's most successful industrial partnerships came to a definitive end. Hero and Honda, names that had been sold from the same showrooms and trusted on the same roads for more than two decades, formally parted ways.

Nearly fifteen years on, both remain formidable players in India’s two-wheeler industry. However, they are not thriving quite the same.

Hero MotoCorp has retained its title as India's two-wheeler market leader. But the dominance that once seemed unassailable has steadily eroded. A decade ago, their annual domestic volumes were separated by 17.58 lakh units. By FY2024-25, that number had narrowed to 2.68 lakh units, widening only marginally to 2.99 lakh units in FY2025-26. Honda is no longer chasing. It is competing.

Honda Motor Company of Japan operates in the Indian two-wheeler market through its wholly-owned subsidiary, Honda Motorcycle and Scooter India (HMSI). And the intent, from Honda's side, was stated last year.

"The number one position is well within our sight," said Minoru Kato, Executive Officer and Chief of Motorcycle Operations at Honda Motor Co, at a news conference in Tokyo.

The contest is entering a new phase. Rural demand is recovering, premium motorcycles are gaining share, and electric vehicles are reshaping the industry's competitive landscape. In EVs especially, both companies are playing catch-up, trailing rivals that moved earlier and faster into a market neither has yet mastered.

For Hero, it is about defending leadership in a market that no longer plays solely to its traditional strengths. For Honda, it is about converting momentum into dominance. The road ahead, for both, is anything but straightforward.

When The Market Changed Lanes

Hero and Honda have historically excelled in different parts of the market.

Hero MotoCorp built its dominance on the back of rural India and the entry-level commuter motorcycle, a segment where its models set the benchmark for decades, with fuel efficiency emerging as the single biggest draw for cost-conscious buyers.

Despite rising competition, Hero's Splendor remains the country's highest-selling two-wheeler brand.

Honda, on the other hand, found its stronghold in urban markets through its scooter portfolio. The Activa scooter has been such a hit that it became synonymous with the category itself.

But the balance began to shift post pandemic. Two-wheeler demand across the industry remained subdued for much of three years and urban markets held up relatively better than rural markets. This hurt Hero disproportionately.

"While Hero has done creditable work with some of its models, its bread and butter remains the motorcycles from the Honda partnership era — the Splendor, the Passion, and their derivatives," said an industry veteran, who did not wish to be named.

Honda, meanwhile, was repositioning. Long perceived primarily as a scooter company, it recognised the limits of that identity and began pivoting toward a more balanced portfolio.

On one end, the Shine 100, launched in March 2023, catered to a credible demand in the commuter motorcycle segment. On the other, the Unicorn was garnering volumes in the premium space. Together, the two models signalled a deliberate push into motorcycle territory that was otherwise dominated by Hero.

What is perhaps more striking is that Hero's market share losses have not primarily benefited Honda. Instead, the biggest gainer has been TVS Motor.

Hero's share of the two-wheeler market has fallen from 36% in FY20, before the pandemic, to 28% in FY26. In contrast, TVS Motor has expanded its share from 14% to 19.5% over the same period, driven by strong portfolio of models across multiple segments of the market.

Honda, meanwhile, has remained largely stable, with its market share edging down only marginally from 27% in FY20 to 26.5% in FY26, as per data from the Society of Indian Automobile Manufacturers (SIAM).

An Uneven Electric Start

While Hero and Honda remain closely matched in the internal-combustion market, the EV race is currently being shaped by others.

Electric two-wheelers, dominated by scooters, are led by TVS Motor, Bajaj Auto, and Ather Energy, with neither Hero nor Honda among the front-runners.

Hero MotoCorp entered the electric space with its Vida brand in late 2022 to a muted response. Over the past year, however, the brand has gained considerable traction, driven by new variants, a wider sales network, and a pivotal shift in its ownership model.

The introduction of Battery as a Service (BaaS) model that lowers the upfront cost of ownership has proved to be a significant sales driver.

Product positioning helped as well. Hero is among a handful of manufacturers offering a removable battery. This was combined with marketing and visibility as it gained sponsorship of an IPL franchise.

"When you combine a differentiated product and brand building like that, you see a 600 basis point gain and hence, you can rapidly gain share," CEO Harshvardhan Chitale said during the company’s conference call post the FY26 earnings.

Hero also holds about 40% stake in Ather Energy, giving it a dual presence in the electric two-wheelerspace. But Harshvardhan Sharma, Head of Auto Retail Practice at Nomura Research Institute, cautions that Vida and Ather give Hero options, not yet an advantage.

“Vida offers direct control over its EV transition, while Ather provides exposure to an EV-native, software-led ecosystem. The moat will depend on whether Hero can convert this into technology leverage, customer migration, and EV profitability, not simply multi-brand ownership," he told The Core.

Honda's EV journey has been far more difficult.

Following a wait-and watch strategy, the company entered the segment only in February 2025 with two products — the Activa e, a swappable-battery scooter for personal commuters, and the QC1, a fixed-battery urban runabout aimed at gig workers. Both saw poor sales, and Honda has since halted production of both, data from SIAM shows.

Jay Kale, Executive Vice President, Research, Elara Capital, believes Hero's EV momentum is set to accelerate further, aided by capacity expansion. Honda's limited presence in the segment, he added, could benefit not just Hero but also Bajaj, TVS, and Ather.

Industry watchers suggest bringing the Activa, one of India's most trusted vehicle nameplates, into a battery-swapping format, with availability limited to a single city, diluted the brand's psychological hold on consumers rather than strengthening it.

But the stumble was less about the technology and more about the timing and scale of the rollout.

"Battery swapping is proving itself as a viable solution, even as it is currently feasible only in certain cities. As EV adoption grows and critical mass builds, it will evolve further," Anurag Singh, Managing Director, Primus Partners, told The Core.

The Active e also offered very limited storage space due to the battery configuration, undermining one of the key attributes that consumers value in a scooter.

Honda, however, is not stepping back from its EV ambitions. Globally, the company noted that electrification momentum in the two-wheeler segment has slowed relative to initial projections. Yet, it said that it will nonetheless proceed with plans to introduce electric models in India and build a dedicated EV production facility here.

“While we continue to develop electric models without slowing down, we will closely monitor changes in the market environment and customer demand and take a flexible and agile approach to product launches and establishment of production operations,” Honda’s global management said in a recent business briefing.

Chasing Global Roads

Honda has traditionally enjoyed a sizable lead over Hero in exports, although both remain behind Bajaj Auto and TVS Motor in overseas volumes.

That gap with Hero has narrowed during the last year.

Chitale acknowledged that Hero entered international markets later than many competitors and said the business remains below its potential. The company now operates in 52 countries and is accelerating its global expansion efforts.

Latin America remains its most established export market, while Africa is a newer frontier. In Bangladesh, Hero currently operates in only half the market. Sri Lanka, where it re-entered after a brief hiatus last year, is another market where it said it is rapidly gaining share.

But the export is largely limited to emerging markets.

"A diversified export base helps cushion against domestic demand downturns. While developed markets like Europe offer better realisations, they also entail tighter regulatory requirements. Regions such as Africa and Latin America provide scale, making a balanced export mix a desired scenario," Rohan Kanwar Gupta, Vice President and Sector Head- Corporate Ratings, ICRA Limited, told The Core.

Honda has also earmarked India as an export hub, a sign that it sees the country as a base to compete globally.

Stumbles and Silver Linings

"Honda's DNA has always been technology, high value, and reliability. But over the last five to ten years, the focus has shifted toward managing the business rather than leading it," said an industry insider.

Honda's management, however, identified India as its largest two-wheeler market and a key strategic strength, one where it runs its biggest sales and service network worldwide, and has a well-established supply chain in place.

Over the years, Hero has also steadily built its in-house engineering and technological capabilities. In 2016, it established an R&D centre at Kukas, near Jaipur.

Hero's bets in the premium segment, meanwhile, have had its own share of challenges. For now, Kale said, Hero will continue to depend primarily on its traditional segments for volumes and margins. The scooter business has shown early promise, and the company will look to replicate that momentum in premium motorcycles, though meaningful success there, he cautioned, is still some time away.

TVS and Bajaj, meanwhile, have tapped into the growing demand for premium motorcycles in the 125cc and above segment.

Hero's collaboration with American cruiser maker Harley-Davidson also took time to find its footing and has so far generated modest traction with the X440, giving the company a limited foothold in the highly competitive segment, with rivals like Royal Enfield, Honda, Triumph.

Not everyone is convinced, however. Sharma noted that the Hero-Harley tie-up is strategically important, but the premium motorcycle scale is built through product cadence, community, retail experience, and brand aspiration, not distribution alone.

"The X440 has given Hero credibility in the premium segment, but meaningful scale will require sharper differentiation and a broader ecosystem around the product," he added.

Gearing Up For More

According to Sharma, the recovery of the two-wheeler segment is real, but it is no longer a simple rural-volume story. The winners will be OEMs that can defend entry-level scale while building credible positions in the 125cc, premium, scooter, and EV segments.

“Hero has the rural cash engine; Honda has the scooter and trust franchise. The strategic question for both is whether they can convert legacy leadership into future-ready portfolio leadership,” he said.

For both, the next move is already underway.

Honda is playing a long-term game, with plans to expand its annual production capacity in India from 6.25 million units to approximately 8 million units by 2028.

Hero MotoCorp, meanwhile, has signalled an aggressive product offensive for FY27, with a fresh wave of introductions spanning commuter motorcycles, high-displacement bikes, the premium segment, scooters, and its Vida electric scooter brand. New products, Chitale said, are expected "quarter after quarter,” though the company declined to share specifics ahead of its launches, citing competitive reasons.

Kale sees Hero's presence in the entry-level and 125cc segments as a core advantage, given that these categories form the bulk of the market. He also views the company's improving scooter traction positively, noting that it addresses one of Hero's two longstanding gaps, the other being premium motorcycles.

"Premium motorcycles will be the key segment to watch as it is the highest growth category in the two-wheeler industry, and Hero's brand acceptance there remains a challenge. How the company applies the lessons from its scooter push to the premium segment will be critical," he said.

The market they once built together is changing faster than either has seen before. How each responds will define the next decade.