Honda's recent announcement to increase two-wheeler production in India to 8 million units by 2028 indicates its broader growth trajectory in the coming years.

Globally, the company holds a 40% share of the total two-wheeler market, amounting to 50 million units. This figure is expected to increase to 60 million units by the end of the decade, with a projected 50% share. At present, India is the largest two-wheeler market, with over 20 million units produced, and Honda ranks as the second-largest player.

Total production across its four plants stands at 6.25 million units. A significant portion of the planned expansion will take place at the Rajasthan facility, where capacity will increase from the current 1.3 million units to 2.01 million units over the next two to three years. The pace of expansion is expected to accelerate from April 2027, when an additional 670,000 units will be introduced.

The second plant commenced motorcycle production in July 2011 with an initial capacity of 600,000 units, which was doubled to 1.2 million units by March 2012. According to the company's website, since 2023, the plant has progressively introduced new technologies to automate machining processes and enhance overall production efficiency.

The third production line will be designed with flexibility to manufacture both 125cc and 160cc scooters, along with light motorcycles.

"Our goal for this fiscal is to catch up with Hero MotoCorp and capture the number one position in the Indian market," stated Honda's leadership team.

Rajasthan plant sets the pace

The Rajasthan plant was commissioned shortly after Honda's separation from Hero in December 2010. This move reflected a clear intent to strengthen its independent presence and compete for market leadership following a 26-year partnership.

Subsequently, the Japanese automaker expanded its footprint by commissioning additional facilities in Karnataka and Gujarat.

Despite Honda's rapid progress, Hero MotoCorp maintained its market leadership. Both companies leveraged strong flagship models to attract customers: Hero with the Splendor commuter motorcycle, and Honda with the Activa scooter.

During a meeting with analysts in Japan in mid-2025, Honda's leadership team stated: "In India, Hero MotoCorp has the number one market share. In the last fiscal year, Hero's share was 29.5% and Honda's 28.3%. Our goal for this fiscal is to catch up with Hero MotoCorp and capture the number one position in the Indian market."

While the overall market was witnessing modest growth prior to GST 2.0, Honda expected it to remain largely stable or register marginal growth. With volumes at 5.6 million units, the company indicated that it was positioned to target the leading market position.

The company added that it would continue to focus on the Activa 125, described as "the best-selling scooter in India", as its core model, along with the SP125 motorcycle, which features a sporty design aimed at stimulating customer demand.

"We believe that we will be number one in India within a year or so, and our profitability in India has also improved significantly compared to the past," stated Honda's top management.

Targeting the top position

In an earlier briefing in Japan, Honda's management indicated that the company had reached a stage where it could aim to secure the leading market share in India.

"The reality is that in some months in the past year, volumes have exceeded those of Hero MotoCorp, the number one company. We believe that we will be number one in India within a year or so, and our profitability in India has also improved significantly compared to the past," the company stated.

According to the management, "the current situation in India is that it has become easier to take the lead in terms of price". This observation may relate to the shift in consumer preference from entry-level motorcycles to more premium offerings with enhanced features.

GST 2.0 provided support to manufacturers, with Hero regaining momentum in the market. As the current fiscal year approaches its conclusion, it remains uncertain whether Honda will be able to secure a leading position during 2026-27.

The company also plans to expand the role of India in its global two-wheeler operations. As stated in the Honda Corporate Update Report 2025: "With a strong sales and service network of 6,000 stores, our sales volumes are increasing. We are growing to the point where we are poised to become the market leader."

The R&D centre at the Manesar facility in Haryana, commissioned over 25 years ago, is expected to play a key role in strengthening development capabilities, enabling a faster response to evolving customer requirements and accelerating product commercialisation. Development efforts will focus particularly on electric vehicles and sub-190cc internal combustion engine models.

"We will capture the largest market share in India's electric two-wheeler market," the company stated.

Expanded role for Honda R&D

Honda R&D (India), based in Bengaluru, will focus on developing cost-competitive and market-relevant products using local talent, components, and suppliers.

This facility will prioritise the rapid integration of advanced technologies through open innovation, alongside software and connected services initiatives. It will also contribute to the long-term development of new services and business models.

Honda plans to expand exports from India by enhancing competitiveness across development, procurement, and manufacturing. Scooters and motorcycles will be exported to Central and South America, where consumer preferences are similar to those in India.

In addition, mid-sized displacement models are scheduled for export to Europe within the current calendar year, supported by competitive pricing and product quality. Currently, Honda Motorcycle & Scooter India exports to 62 countries across North, Central, and South America; Europe; Asia and Oceania; the Caribbean; Africa; and the Middle East.

Beyond expanding capacity at Rajasthan and other facilities, Honda has announced plans to establish a dedicated plant for electric two-wheelers in 2028.

At present, its presence in the electric segment remains limited, with models such as Activa e: and QC 1 yet to achieve significant market traction, while competitors including TVS, Bajaj, and Ather have established a stronger position.

However, Honda is pursuing a long-term strategy in the electric segment, with multiple models planned for the new facility. Production will incorporate modular architectures shared across different models. In terms of batteries, the company is working with manufacturers to develop specifications tailored to two-wheeler requirements and to ensure stable supply.

"We will create new value that only Honda can offer by combining the strengths developed through our ICE with the unique value of electrification, aiming for the top market share in electric two-wheelers as well," the company stated.

Focus on total cost of ownership

With the new facility, Honda aims to reduce the total cost of ownership (TCO) for electric scooters. The company intends to price its electric models such that the TCO over three years is comparable to that of internal combustion engine models.

Through this facility and related initiatives, Honda is targeting a leading position in India's electric two-wheeler market by offering a broad range of models tailored to diverse customer requirements.

According to the Integrated Report 2025, the adoption of modularisation and related measures at the new facility will enable the development of a flexible and highly efficient production system, with assembly line lengths reduced by approximately 40% compared to conventional setups.

The company also plans to implement advanced production technologies. "For example, to achieve lighter products, we are thinning aluminium parts and replacing materials with lightweight steel, thereby realising high-quality vehicle bodies that achieve both lightness and strength through advanced processing technologies," it stated.

Honda will continue to reduce costs by improving production efficiency through automation and labour-saving measures, while promoting local production and consumption to offer electric two-wheelers at competitive prices.

"Together with these initiatives, we will create new value that only Honda can offer by combining the strengths developed through our ICE with the unique value of electrification, aiming for the top market share in electric two-wheelers as well," the company added.