Two-wheeler industry is expected to clock 7–9% volume growth in FY27, taking total dispatches past the 29 million-unit mark, driven by steady domestic demand and strong export momentum, according to Crisil Ratings.
Domestic sales, which account for nearly 80% of industry volumes, will continue to anchor growth. After a flat first half in FY26 amid weak sentiment, volumes rebounded sharply from September following GST rationalisation that lowered vehicle prices by 7–8%. Rural demand strengthened on the back of a healthy kharif crop and improving farm incomes, while urban demand benefited from softer interest rates and easing inflation.
“In fiscal 2027, we expect domestic two-wheeler volumes to grow 6–8%, broadly in line with the current fiscal,” said Anuj Sethi, Senior Director, Crisil Ratings. Motorcycles, which contribute about 60% of domestic volumes, are likely to see mid-single-digit growth, reflecting a mature commuter base and stable rural demand. Incremental growth is expected from scooters, with overall volumes seen rising in early double digits and e-scooters in the mid-teens, supported by higher urban usage, increasing female participation and expanding last-mile mobility needs.
Premiumisation trends remain intact. Entry-level motorcycles up to 125cc continue to dominate with a 73% share, but demand is gradually shifting toward the 150–350cc segment. The share of these higher-capacity models has risen from around 23% in FY25 to 25% this fiscal, reflecting improving affordability. Motorcycles above 500cc remain a niche, accounting for less than 1% of total volumes, limiting the broader impact of the proposed India–US trade agreement focused on this segment.
Exports, contributing about 20% of overall volumes, are expected to provide incremental support. “Two-wheeler exports are likely to rise 21–23% this fiscal and sustain mid-to-high teen growth in FY27,” said Poonam Upadhyay, Director, Crisil Ratings. Latin America, Africa and South Asia, which account for nearly 90% of export volumes, are expected to anchor expansion.
Crisil estimates industry revenue will grow 10–12% next fiscal, after an expected 15–17% rise this year. Operating margins are projected to sustain at around 16%, supported by operating leverage and premiumisation, despite elevated aluminum and steel prices. Healthy profitability is expected to generate internal accruals sufficient to fund capex of around Rs 6,000 crore in FY27 while keeping leverage and credit profiles resilient.