ICRA has projected two-wheeler wholesale volume growth of 3–5% year-on-year in FY2027, supported by resilient consumer demand, GST rationalisation measures, and improving replacement demand across rural and urban markets.
The rating agency noted that recovery in rural demand and favourable policy support are expected to sustain momentum in the two-wheeler industry. However, growth is likely to face moderation due to a high base effect, rising input costs, fuel-led price increases, and concerns over a weak monsoon linked to El Niño conditions in the coming months.
Despite these challenges, the sector is expected to maintain stable growth as manufacturers continue to benefit from improving market sentiment and steady replacement cycles.
Domestic wholesale volumes witnessed a sharp increase of 29.2% year-on-year (YoY) in April 2026, reaching 1.9 million units. This growth was primarily supported by improved demand conditions following the implementation of GST 2.0 reforms, which have aided affordability. Despite the strong underlying demand drivers, the ongoing conflict in West Asia poses potential risks to supply chains and may exert upward pressure on commodity prices. Industry participants continue to closely monitor these developments.
Retail demand also remained healthy, with volumes rising by 13.0% YoY during the month. Growth was supported by improved vehicle affordability, lower-than-anticipated price hikes, and sustained rural cash flows driven by strong agricultural output. Additionally, the extended wedding season (till mid-May) provided a temporary demand boost.
The electric two-wheeler (e2W) segment continued to gain momentum. Retail sales of e2Ws stood at 1,54,337 units in April 2026, registering a robust 68.1% YoY growth. For FY2026, e2W volumes expanded by 21.9% YoY, with penetration within the overall two-wheeler segment reaching 8.1% in April 2026. The segment’s sustained growth reflects increasing consumer acceptance, supported by expanding product availability and improving cost competitiveness.
Exports remained a key growth driver, with monthly export volumes increasing by 38.3% YoY in April 2026, even as certain overseas markets continued to face headwinds. For FY2026, overall export volumes grew by 23.3%, supported by expanding product offerings and enhanced global recognition of Indian two-wheeler brands. However, geopolitical uncertainties, particularly in West Asia, remain a key risk to export performance.
