Indian two-wheeler industry is expected to grow at a moderate pace in FY27. The segment is expected to grow by 5- 8% in this fiscal, supported by stable macro conditions and continued urbanisation. However, the key driver in this category will be demand mix rather than volume.
According to a study by Jato Dynamics, scooters are expected to gain further share in the Indian two-wheeler market as urban demand remains strong for this category. The study further stated that electric two-wheeler penetration in India could rise to 7-9%. However, the study also stated that the pace of penetration for electric two-wheelers will depend on subsidy continuity, pricing, and infrastructure expansion – the key factors that have been driving the growth in this space so far.
From an OEM perspective, the study has projected that Honda would continue to gain momentum in the motorcycle segment while maintaining leadership in scooters. On the other hand, TVS Motor Company is strengthening across both motorcycle and scooter segments. The largest player in terms of volume, Hero MotorCorp, despite its scale at 42% in motorcycles, remains underexposed to scooters and electric two-wheelers. The company has only around 6.6% market share in the bulging scooter segment in India.
According to Jato Dynamics, if electric two-wheeler adoption in India accelerates further, OEMs strong in scooters will benefit, which indicates brands like TVS, Bajaj, Ather, etc. However, if EV adoption slows, motorcycle-heavy players may see relative stability. This creates divergent outcomes depending on how quickly the demand mix shifts.
The study also stated that seasonality will remain important. Festive demand will continue to drive spikes in motorcycle sales, but its overall influence may decline as urban demand becomes more prominent towards scooters and electric two-wheelers.
According to the report, in a nutshell, the Indian two-wheeler industry continues to operate at scale, with volumes growing from 18 million in FY24 to 22.3 million in FY26. However, this growth masks a more fundamental structural shift. Incremental demand is no longer being driven by the traditional mass petrol-powered motorcycle model, but increasingly by scooters and, within them, by early-stage electrification.