Business-Standard reports that, according to its industry sources, Hero Motocorp finished July 2015 with a domestic market share of 36% which is the lowest in the last 12 years. It’s also reported that the giant has already lost leadership positions to its former partner Honda in 8 states and union territories.
The market share plummeted below 40% for the first time in 11 years after peaking in 2008-09 at 49%. Meanwhile, Honda Motorcycle and Scooter India Ltd. (HMIL) closed July with an all-time high market share of 29% in the domestic market.
Apart from raising competition, other factors that contributed to the downturn include poor response from rural market (40-50% of Hero’s sales come from rural areas) owing to low agricultural output and drop in government backed upliftment schemes.
Hero Motocorp rules the entry level 100 cc commuter segment with Splendor and Passion series accounting for nearly 70-80% of the company’s total sales. There motorcycles have a huge customer base in rural areas, hence a slow rural market has been hurting the bottom line for the last few months.
Moreover, the two wheeler stalwart is not as sure footed in higher segments as it is in entry level space. HMSI dominates the 125 cc segment whereas Bajaj Auto comfortably leads the 150 cc segment. Even in automatic scooter segment, Hero is currently behind Honda and TVS.
Responding to the publication’s query, Hero Motocorp stated that it’s grossly unfair and misleading to talk only about a month’s market share, considering that the company has a YTD share of 71% in 75-115 cc segment and nearly 51% in 125 cc segment for Q1 FY2015.
The statement further goes on to say, “The historical data quoted by you (publication) on monthly share is inclusive of exports and that’s not the way the industry calculates market share. Even then, the historical data is factually wrong, as we had a market share (inclusive of exports) of over 37% in July 2012.”
Via – Business-Standard.com