Hero MotoCorp plans major scooter and EV capacity expansion with rising demand

Hero MotoCorp expects India's two-wheeler industry to grow at a high single-digit rate in financial year 2027, following a 26.4% increase in 2026. The company aims to outpace overall market growth, focusing on expanding both internal combustion engine (ICE) scooters and electric vehicles (EVs) to meet rising demand.

Key Highlights

• Hero MotoCorp expects high single-digit growth for India's two-wheeler industry in FY27
• Scooter sales grew 18.5 percent in FY26 while motorcycle sales rose 6.6 percent
• Company plans over Rs 1,500 crore capital expenditure to expand EV and scooter capacity
• Hero aims to double electric vehicle production capacity to over 50,000 units per month this year

Industry Growth and Market Trends

In the financial year 2026, India's two-wheeler industry saw volumes rise to 21.71 million units, up 26.4% year-on-year. A mid-year GST reduction helped boost demand, pushing segment volumes past pre-pandemic levels. Motorcycle sales increased by 6.6% to 13.06 million units, while scooter sales grew 18.5% to 8.12 million units.

Scooters are expected to continue outpacing motorcycles in growth, with Hero MotoCorp management projecting scooters will grow a few percentage points faster than motorcycles in FY27. Despite inflationary pressures and concerns over the West Asia conflict's impact on fuel prices, retail demand has remained stable through April and early May. Management noted that fuel prices have stayed largely stable, and no significant impact on volumes has been observed so far. However, they remain cautious about potential changes if inflation or fuel prices rise in the coming months.

Hero MotoCorp's Expansion Strategy

Hero MotoCorp plans to grow faster than the market by introducing new products and expanding capacity. Last year, the company launched nine new products and several updates, filling key gaps in both its motorcycle and scooter lineups. Hero retained its position as India's largest two-wheeler manufacturer, despite increasing competition from Honda, TVS Motor, and Suzuki Motorcycle India.

The entry-level motorcycle segment saw improved demand, aided by GST-led affordability. The Hero Splendor played a significant role in volume recovery. However, competition in the scooter segment intensified, with TVS Motor and Suzuki gaining market share.

To support future demand, Hero MotoCorp has committed over Rs 1,500 crore in capital expenditure for FY27. This investment will expand manufacturing capacity for EVs and high-growth scooter models and support new product launches. The company has already increased production capacity for the Destiny scooter by 50% and is working to double capacity for the Xoom range.

Electric Vehicle Capacity Expansion

Hero MotoCorp is nearing completion of a project to increase EV manufacturing capacity by 50% over the previous quarter within a month. By the end of this year, the company plans to double its EV capacity, reaching over 50,000 units per month. These steps align with broader trends of urbanization, e-commerce growth, and the gig economy, which continue to drive two-wheeler demand in India.

Also Read: Hero MotoCorp March 2026 Sales: Splendor leads with 3.14 lakh units, EVs and premium bikes surge ahead

CarBike 360 Says

​Hero MotoCorp’s aggressive expansion strategy signals a strong push toward future mobility, blending its legacy in scooters with growing EV ambitions. As demand surges, this move not only strengthens its market position but also aligns with India’s electrification goals. The coming months will be crucial in determining how effectively Hero capitalizes on this momentum.