India’s two-wheeler industry experienced a significant recovery in December 2025, with a 9.5% year-on-year increase in sales. This growth was driven by year-end demand, policy-driven affordability enhancements, and improving macroeconomic conditions, according to a report by ratings agency ICRA.
ICRA’s report forecasts a 6–9% year-on-year growth in domestic two-wheeler volumes for FY26. This growth is expected to be fueled by the recovery in replacement demand, urban consumption, and stable rural incomes. The agency highlighted the recovery in urban discretionary spending, stable rural incomes, and government expenditure as favorable factors.
Retail volumes surged by 9.5% in December, boosted by year-end discounts and pre-purchases by customers anticipating price hikes in January 2026. Factors such as improved affordability, enhanced financing options, and increased showroom foot traffic contributed to this retail momentum, especially in entry-level motorcycles and scooters.
Electric two-wheeler sales saw a substantial 32.8% year-on-year growth, with retail volumes reaching 97,744 units. Despite this growth, the penetration of electric two-wheelers remained steady at around 6–7% during 9M FY2026, indicating a gradual adoption phase influenced by evolving consumer preferences and infrastructure readiness.
Wholesale volumes witnessed a notable 38% year-on-year increase to approximately 1.5 million units in December. This growth was supported by a low base and inventory restocking ahead of the new year. Cumulatively, wholesale volumes grew by 4.8% during 9M FY2026 (April–December), reflecting a steady recovery throughout the fiscal year despite occasional softness in demand.
Exports played a crucial role in the industry’s growth in December 2025, with monthly volumes rising by 25.2% year-on-year. Cumulative industry exports also saw a 24.1% increase during 9M FY2026, driven by a low base and rising demand in key international markets. Looking ahead, ICRA anticipates a broader policy-backed recovery in FY26, with exports and the normalization of domestic demand playing pivotal roles.
