Hero MotoCorp faces challenges as market share declines, leaders quit

Company's market share is at its lowest in a decade, key executives are leaving, and new product launches have not performed as expected

Hero MotoCorp (HMC), India’s largest two-wheeler manufacturer, faces tough times. Company Executive Chairman Pawan Munjal said in a townhall meeting last fortnight with more than 5,000 employees that underperformance will not be tolerated, according to a report by The Economic Times.

 

According to the business newspaper, the company is dealing with multiple challenges. Its market share is at its lowest in a decade, key executives are leaving, and new product launches have not performed as expected. Competition from TVS Motor Company, Bajaj Auto, and Honda Motorcycle and Scooter India (HMSI) is increasing.

 

Market share decline

 

According to the meida report, HMC sold 5.4 million two-wheelers in 2024, a 2.5 per cent increase from 2023. Competitors are growing at a much faster pace. HMSI, its closest rival, sold 4.7 million units in 2024, growing by 20 per cent and cutting Hero’s lead by half compared to the previous year.

 

 

Hero’s market share in the two-wheeler segment dropped to 28 per cent in the second quarter of FY2024-25 and slightly recovered to 29 per cent in the third quarter. However, for the entire year, the share fell from 31.33 per cent in 2023 to 29.02 per cent in 2024. The decline continued in January 2025, with market share dropping to 26.92 per cent from 28.08 per cent a year earlier.

 

Munjal urged employees to step up their efforts, noting that while new models contribute 20 per cent of TVS sales, they account for only 7 per cent of Hero’s sales in the first nine months of FY2024-25.

 

Leadership exits and struggles

 

After the town hall, Niranjan Gupta and Ranjivjit Singh resigned as chief executive officer (CEO) and chief business officer. Gupta had taken over as CEO in May 2023 and was leading efforts to expand Hero’s premium motorcycle portfolio and electric vehicle (EV) segment.

 

Hero has also lost other key executives in recent months. Chief Human Resources Officer Rachna Kumar left within a year of joining. Chief Technology Officer Arun Jaura, who led the development of premium bikes and EVs, quit in April 2024. Chief Operations Officer Michael Clark left in October 2024 after four years with the company.

 

Currently, Vikram Kasbekar, a Hero veteran, is acting as CEO and handling the CTO role. The company is struggling to retain talent at leadership levels, which is affecting its decision-making and overall strategy.

 

EV and premium segment challenges

 

Hero entered the EV market in mid-2022 but has struggled to gain a foothold. In January 2025, it sold only 1,615 electric scooters, compared to market leader Ola Electric’s 24,336 units. However, Hero has a 40 per cent stake in Ather Energy, a rising EV player.

 

Despite launching new premium motorcycles such as Mavrick 440, Karizma XMR, XPulse, and Xtreme 200, the company remains heavily dependent on older models like the Splendor, which was developed 27 years ago.

 

Future plans

 

Hero recently introduced four new internal combustion engine (ICE) models, including two premium motorcycles—Xtreme 210 and Xtreme 250R—and two new scooters—Xoom 125 and Xoom 160. It also launched affordable EVs.

 

The company expects demand to rise in the upcoming wedding and festive seasons. Hero hopes that rural demand, which grew by 3 per cent during the last festive period, will help improve sales.

 

Stock and financial performance

 

According to The Economic Times, Hero’s stock price has dropped 18 per cent in the past year, while Bajaj Auto and TVS have grown by 8 per cent and 19 per cent, respectively. Over a three-year period, Hero’s sales compound annual growth rate was only 7 per cent, compared to 17 per cent for TVS and 26 per cent for Bajaj.