Mumbai— India’s two-wheeler industry is set to surpass pre-Covid sales levels in FY2025-26, with projected volume growth of 8–9 percent, according to a new report by CareEdge Ratings released Monday.
The anticipated growth is driven by several key factors, including easing inflation, improved disposable income from full tax rebates for individuals earning up to ₹12 lakh annually, and a more accommodative monetary policy. The Reserve Bank of India’s cumulative 100 basis point rate cut since February 2025—including a 50 bps cut just last week—is expected to further improve consumer sentiment and affordability. A favorable monsoon could also amplify demand, especially in rural markets.
Over the past three fiscal years, the industry has posted consistent gains: 8 percent in FY23, 10 percent in FY24, and 11 percent in FY25. In FY25 alone, export volumes surged by 21 percent, while domestic sales rose by 9 percent, fueled by recovering rural demand and continued urban growth. The rebound in exports was credited to stabilizing conditions in key international markets that had previously struggled with inflation, high interest rates, and currency volatility.
“The two-wheeler industry is on track to exceed pre-Covid volumes in FY26, with growth expected at 8–9 percent,” said Madhusudhan Goswami, Assistant Director at CareEdge Ratings. “Export volumes are projected to grow by 12–14 percent, while domestic sales should maintain a steady 6–8 percent increase.”
He added that growth would be further propelled by strong overseas demand, the rising adoption of electric vehicles (EVs), rural market revival, and enhanced affordability due to interest rate cuts.
In FY25, rural regions accounted for 58.3 percent of all retail two-wheeler registrations, a slight increase from 57.9 percent in FY24. While wholesale volumes for the year reached 23.81 million units—just shy of the FY19 peak—the market continues to narrow that gap. The report also notes a shift in consumer preferences, with increased interest in scooters and executive motorcycles, alongside a steady recovery in entry-level motorcycles since FY23. (Source: IANS)
