Hero MotoCorp's production lines are straining to meet a wave of two-wheeler orders that followed tax reductions, while raw-material cost pressures and intensifying semiconductor competition — driven partly by artificial intelligence and other fast-growing industries — are adding complexity to supply chains across India's manufacturing base. The company's own leadership noted that an opening of this kind, where customer demand outpaces available stock, has not presented itself in quite some time.
Vikram Kasbekar, Executive Director at Hero MotoCorp, described the situation as an enviable one to navigate, making the remarks at a Confederation of Indian Industry visionary leadership for manufacturing event held in Mumbai on Monday.
Kasbekar noted that GST rate adjustments had lifted conditions across the wider vehicle sector, with producers expanding capacity in anticipation of rising consumer uptake. Automakers find themselves under pressure to expand output at a time when unpredictable sourcing conditions and shifting input costs complicate the path forward.
When asked about climbing battery and cell prices and what those trends mean for electric vehicle makers, Kasbekar pointed to mounting input costs on the raw materials side. He noted that the industry has always carried a degree of unpredictability, and that organisations operating within it remain ready to navigate those conditions.
No figures were offered on how the cost increases might affect Hero MotoCorp's profit margins, nor was any direction given on whether those added expenses would be absorbed by the company or reflected in prices paid by buyers.
Kasbekar noted that procurement approaches for microprocessors, controllers, and other electronic components were diverging across the industry, with each firm tailoring its supply chain tactics to its own particular needs. Taiwan's role as a principal supplier of high-end microprocessors drew his attention, alongside the expanding appetite for chips driven by computing, storage, and processing workloads tied to artificial intelligence. Shifting demand patterns add yet another procurement hurdle for vehicle makers, though Kasbekar stopped short of linking Hero MotoCorp's present supply difficulties to semiconductor availability.
Also present at the CII gathering, Godrej — who chairs and manages the Godrej Enterprises Group — put forward the view that chasing total manufacturing self-reliance would undermine India's industrial standing, pointing out that the specialised production capacities built up by various countries made participation in global supply networks a practical necessity rather than an option.
Pointing to the machine-tool sector as an example, he noted that CNC controls, ultra-precision machinery, laser equipment, and advanced cutting tools still arrive from foreign suppliers — a pattern that has persisted across many years of domestic manufacturing activity — before posing the question of whether local production could ever cover every such need. His answer was no.
The view put forward by Godrej was that India held the capacity to build its standing as a worldwide source of machinery for smaller businesses, all while drawing on specialised technologies from abroad.
Kasbekar argued that domestic manufacturers need to build up their intellectual property portfolios and technological know-how to hold their own on the world stage, adding that product design, development, and innovation would need to drive the industry's research and development efforts. That location, he noted, is where the intellectual property resides.
Bringing production methods into line with global benchmarks is something the manufacturing sector will need to address, he contended — a process that could draw on headway the two-wheeler industry has already established in both technological development and cost management.
Balancing festive-season demand against unresolved sourcing pressures and rising input costs stands as the most pressing task now facing Hero MotoCorp. Building domestic technological capacity while staying connected to the global supply networks that underpin competitiveness represents the deeper, enduring challenge ahead for India's manufacturing sector, according to the positions outlined at the event.
