Mumbai: India’s largest two-wheeler maker Hero MotoCorp Ltd has increased its market share during April and May, according to lobby group Society of Indian Automobile Manufacturers (SIAM).

Buoyed by a recovery in rural purchasing power and onset of the wedding season, Hero’s market share was at 35.98% in the first two months of the current fiscal year, an increase of 40 basis points from the year-ago period. One basis point is one-hundredth of a percentage point.

The New Delhi-based auto maker had been consistently losing market share since 2011-12 to close at 36.56% in FY18, down 30 basis points from a year ago.

The recent rise in market share followed aggressive product positioning in terms of pricing and feature upgrades, analysts said.

The maker of the Splendor and Passion motorcycles is the leader in the entry-level and commuter motorcycle segment (with engine capacity under 125cc), selling one of every two models in the category.

Monthly scooter sales, which had been outpaced by motorcycle sales in the first four months of the calendar year, declined in May for the first time since January 2017, according to SIAM.

Hero’s market share for scooters fell by one percentage point during April and May to 13.15%, compared to the year-ago period.

The company’s market share is at the lowest levels in over two decades with competitors, including Honda Motorcycles and Scooters India (HMSI) Pvt. Ltd, eating into its share. Its market share stood at 44.69% in 2010-11, the year that saw the Pawan Munjal-led automaker severing ties with the local unit of Japanese automaker Honda, which has more than doubled its market share to 30.33% in FY18 from 13.15%.

Analysts said the automaker will be able to maintain its market share this fiscal year, but the prospects of growing substantially are dim. “Hero has an aggressive strategy for this year, which we expect to continue with the launch of two premium motorcycles (200cc) in July. If motorcycles continue to pick up versus scooters, Hero’s market share will rise or remain at current levels for this fiscal," said Richa Bulani, a senior analyst at India Ratings and Research.

Factors such as aggressive pricing from Bajaj may not significantly impact Hero’s market share given an overall growth in motorcycle volumes and new product launches from Hero with a high focus on the domestic market", Bulani added.

However, the divergence in growth between scooter and motorcycle sales is expected to normalize from the July quarter with scooter sales in urban areas expected to recover during the monsoon, a cyclical trend that is seen every fiscal year, said Ashutosh Tiwari, head of research at Equirus Securities Pvt. Ltd.

“A revival in rural demand this time around has especially boosted motorcycles. If this continues, Hero will maintain its share, but it will be difficult for it to grow on a high base," Tiwari added. Analysts expect India’s two-wheeler industry to post low double-digit growth this financial year.