Mumbai, June 10 Domestic two-wheeler sales are expected to grow 8-9 percent this fiscal, surpassing pre-Covid-19 levels, a report said on Monday. This includes several other factors including moderating inflation and the possibility of a favourable monsoon.
The CareEdge Ratings report also mentioned that the domestic two-wheeler industry has maintained a healthy growth of 8 percent, 10 percent and 11 percent in FY23, FY24 and FY25, respectively.
Sales growth in FY25 was supported by a 21 percent export recovery and a 9 percent growth in domestic sales. It said the improvement in exports was led by stability in key markets impacted by inflation, high interest rates and currency issues in the past years.
Domestic sales were supported by substantial growth in rural demand and continued growth in urban demand, CareEdge said.
“Two-wheeler sales will continue to maintain strong momentum in FY26 based on the stellar performance of FY25. Despite a marginal 1-2 percent price hike due to high base and implementation of OBD-II Phase-B norms, the industry is well-positioned for 8-9 percent volume growth in FY26,” it said.
Madhusudan Goswami, assistant director, CareAge Ratings, said, “CareAge Ratings estimates the two-wheeler industry to surpass pre-Covid levels with healthy volume growth of around 8-9 percent in FY26, including 12-14 percent growth in export volumes and a steady 6-8 percent growth in domestic sales volumes.”
Goswami said this growth will be led by strong export demand, increased adoption of electric vehicles (EVs), moderating inflation and improving rural sentiment, supported by expectations of a favourable monsoon and better income levels.
In addition, the cumulative 100 bps rate cut by the RBI since February 2025 and the 50 bps rate cut announced last week are expected to enhance affordability and spur demand, he said.
Noting that domestic two-wheeler sales growth may moderate slightly due to a high base, strong export momentum and rising EV adoption will help sustain overall industry volume growth, Aarti Roy, associate director, CareEdge Ratings, said the implementation of OBD-II Stage-B emission norms is expected to have minimal impact, as the market is showing resilience and adaptability.
“Additionally, good growth in executive and premium segment motorcycles is expected to support this growth in FY26,” she added.
CareEdge Ratings also said the overall growth in two-wheeler volumes over the last three fiscals has been supported by rising demand for electric two-wheelers (e2W).
In FY23, E2W sales reached nearly 0.78 million units, accounting for 4.38 percent of total two-wheeler sales (compared to 1.78 percent last year), reflecting a remarkable year-on-year growth of 180 percent, albeit on a very low base. This positive trend continued and E2W sales grew 29 percent in FY24 and 19 percent in FY25 to reach 1.20 million units in FY25, CareEdge said.
