Hero MotoCorp to lose top spot in 2-wheeler sales to HMSI: Elara Capital

Hero MotoCorp will lose its top spot in monthly domestic two-wheeler sales to Honda Motorcycle and Scooter India (HMSI) in September for the first time since May 2020, stated Elara Capital in a report on Friday, based on national vehicular registry Vahan's data.

"September retail figures for HMCL (Hero MotoCorp) were at 222,712 units until September 28 while HMSI's 255,909 units," the report added.

The brokerage and research firm said that the cause for concern for HMCL is that in terms of market share in rural states, HMCL has lost month-on-month (MoM) market share in the range of 100-800 basis points.

"While September usually sees this phenomenon MoM, the extent of loss in market share this time is alarming," it mentioned.

The report said that rural states, such as Uttar Pradesh, Bihar and Jharkhand, have fallen higher in September on a MoM basis. "In these states, HMCL has a dominant market share of 50 per cent," it added.

HMCL's sales in Uttar Pradesh dipped 36 per cent MoM, followed by Bihar at 24 per cent, Rajasthan at 22 per cent, and Jharkhand at 21 per cent.

HMCL sold 302,787 units in India in August 2022, and HMSI sold 286,792 units in the same month, as per Vahan's data, collated by the Federation of Automobile Dealers Associations (FADA).

Assuming that September month's sales data will be its lowest in FY23, it is estimated that HMCL's domestic market share during the financial year would stand at about 28 per cent, Elara Capital stated. In FY22, HMCL had a market share of 30 per cent.

The brokerage and research firm also mentioned that the trend in HMCL's sales is expected to reverse in November, given that Navratri and Diwali will be celebrated in October this year.