Riding on Strong Demand! Two Wheeler Market in India to See 8-10% Growth Next Year

India’s two-wheeler market is on a strong growth trajectory, with an expected 8-10% rise in sales next year. This follows an estimated 12-14% surge in the current fiscal year, according to a report by Crisil Ratings. The industry is set to surpass its previous peak of over 24 million units recorded in 2019, driven by increasing demand and a diverse range of models, including electric two-wheelers (e2Ws).

Key Factors Driving India's Two Wheeler Market Expansion

The report highlights four major factors behind this consistent growth:

Strong rural demand fueled by rising incomes and better economic conditions.

Urban shift towards premium motorcycles with a preference for high-performance models.

Improved export opportunities, particularly in Africa, Latin America, and other emerging markets.

Expansion of electric two-wheeler options, offering more choices for consumers.

With these factors in play, manufacturers expect continued revenue growth of 10-12% in the next fiscal year, following a robust 16% increase this year. The shift toward premium models is also boosting profitability.

Higher Profit Margins and Export Growth

Two-wheeler manufacturers are seeing higher operating margins, which are expected to reach a decade-high level of around 15% this fiscal and remain stable next year. This is an improvement from the 14% average recorded over the past three years. The rise of premium motorcycles and electric two-wheelers is playing a key role in improving margins.

Domestic sales currently account for 85% of the two-wheeler market, while exports make up the remaining share. The report predicts that domestic demand will grow by 7-8% next year, while exports will expand even faster at 11-12%, supported by strong demand in international markets.

Premium Motorcycles and Scooters Gaining Popularity

Motorcycles dominate India’s two-wheeler industry, accounting for nearly two-thirds of total internal combustion engine (ICE) vehicle sales. The shift towards high-performance bikes is evident, with premium and executive motorcycles (above 110cc) now making up over 50% of the market.

Additionally, consumers are increasingly interested in larger-engine scooters for enhanced performance and comfort. This segment is projected to grow by about 27% this fiscal, with double-digit growth expected next year as well.