**Hero Motocorp Faces Challenges Despite Sales Growth in FY2025**
Hero Motocorp, the world’s largest two-wheeler manufacturer, reported a 4% increase in sales, reaching 5.6 million scooters and motorcycles in FY2025. However, the company is grappling with significant challenges, including high-profile executive departures and intensified competition from Honda Motorcycle and established rivals like Bajaj Auto and TVS Motor.
Pawan Munjal, the 71-year-old executive chairman who stepped down as managing director and CEO two years ago, is once again in the spotlight. The company recently experienced notable exits, including CEO Niranjan Gupta and Chief Business Officer Ranjivjit Singh. In response, Hero has appointed Vikram Kasbekar as the acting CEO to fill Gupta’s role, which he assumed in 2023.
Despite Hero’s sales growth, the company is under pressure from Honda Motorcycle, which achieved an 18% increase in sales, totaling 5.3 million two-wheelers. At the beginning of the last fiscal year, Hero held a lead of 900,000 units over Honda, but this margin has dwindled to less than 300,000 units as of March 31, 2025.
In the electric vehicle sector, Hero is lagging behind its competitors. The company sold only 48,674 electric Vida scooters in FY2025, increasing its market share from 1.8% to 4.2%. However, this figure pales in comparison to TVS Motor and Bajaj Auto, which sold 237,576 and 230,806 electric scooters, respectively.
Additionally, Hero’s scooter sales declined by 2%, dropping to 391,419 units in FY2025 from 400,453 units in FY2024, even as the overall scooter market grew by 17%, surpassing pre-pandemic levels of 6.7 million units. Munjal, who has been with the company since it became the largest two-wheeler manufacturer in the world in 2001, faces the daunting task of steering Hero towards greater competitiveness.
Munjal’s immediate challenges include appointing a permanent CEO, boosting two-wheeler sales growth, and establishing a stronger foothold in the electric vehicle market. Investors have reacted to the company’s performance, with Hero’s share price declining by 4.5% in 2025, contrasting with a 1.1% increase in the Nifty Auto index.
As Hero prepares to announce its January-March results, analysts predict a revenue growth of 2.1%, reaching ₹9,710 crore. The upcoming results will be crucial for assessing the company’s strategy and performance in a rapidly evolving market.
**FAQ**
*What challenges is Hero Motocorp currently facing?*
Hero Motocorp is facing challenges such as high-level executive departures, increased competition from Honda Motorcycle and legacy rivals, and a need to strengthen its position in the electric vehicle market.
