The two-wheeler industry is expected to post high single-digit volume sales growth in 2026-27 (FY27) due to resilient demand for motorcycles and scooters across India despite the ongoing conflict in West Asia pushing up commodity costs, Harshavardhan Chitale, chief executive officer, Hero MotoCorp, said on Wednesday.
About 21.71 million two-wheelers were sold in India in FY26, recording 10.7 per cent year-on-year growth, primarily driven by the Goods and Services Tax (GST) rate cuts implemented in September 2025.
“Industry expects high single-digit volume growth in FY27 and growth in motorcycles as well as scooters,” Chitale said, adding that the sector has “started the year on a positive note, continuing the momentum that we saw in the second half of FY26”.
Chitale, while talking to market analysts in a post-results call, said there has been “no softening of demand yet” in April and early May as input cost increases have not been fully passed on to customers.
He also pointed to a favourable base, saying last year’s strong second half provided support to growth momentum this year, while underlying drivers such as e-commerce expansion and gig economy demand continue to support volumes.
Detailing the company’s priorities, Chitale said scooters, electric vehicles (EVs), alternative low-emission technologies, and exports will drive the next phase of growth, alongside capacity expansion.
He said the company has already increased Destiny scooter capacity by 50 per cent in FY26 and is in the process of doubling Xoom scooter capacity within the quarter.
“We will have an even stronger play going forward in scooters,” he said, adding that EVs remain “a second area of focus” as the company continues to invest in product development and scale-up.
On EVs, capacity is being ramped up from about 15,000 units a month to 25,000 units, with plans to double it again by the end of the year.
He also pointed to “other low-emission powertrains” as an area of focus, and said the company would be launching vehicles that can run on higher ethanol blends. Currently, Indian vehicles run on E25 blend (25 per cent ethanol mixed with petrol).
He said exports offer significant room to grow, with a strong presence in Latin America, expansion plans across Africa, a leadership position in Bangladesh with presence in about half the market, and a re-entry into Sri Lanka that is gaining traction.
Chitale said the company’s focus on scooters is structural and likely to continue. “Scooterisation has happened to the industry and scooters as a share of two-wheeler industry has grown by a couple of points every year,” he said, adding that this trend is expected to sustain in the near term.
He, however, clarified that motorcycles and scooters serve different use cases and customers using the former are not shifting to the latter.
On external risks, Chitale said the ongoing West Asia conflict is pushing up input costs. “The broader economy is navigating certain short-term uncertainties due to the developments in West Asia,” he said, adding that this has increased costs of metals, gas, and labour.
He said commodity pressures, which started in March, will affect profitability in the near term. “We expect that there will be a transitionary impact on our margins in the short term,” Chitale said.
He said the company has already increased prices of its products. “Price hike that we have taken is close to two per cent,” Chitale said, translating to increases of about Rs 700 to Rs 3,500 per vehicle depending on the model, while noting that this will not fully offset the rise in input costs.
Hero MotoCorp, India’s largest two-wheeler maker, is also tightening its belt, especially by cutting its discretionary spends, to manage margins.
The chief executive officer added that dealer inventory has been brought down to about five weeks, while inventory for EV scooters remains lower due to capacity constraints, demonstrating strong demand.
Despite near-term pressures, Chitale reiterated the company’s margin outlook. “We are committed to our margin guidance of maintaining 14 per cent to 16 per cent,” he said, even as investments continue in EVs, capacity expansion, and new product development.
