The Dynamics of the Indian Two-Wheeler Industry: Trends, Challenges, and Future Prospects

In addition to its numerous positive outcomes for Indian society, the rapid pace of urbanization and impressive economic development have also led to overcrowded cities and serious traffic and parking issues.

These problems have become the main drivers of the growth of the two-wheeler industry, although there are other major drivers, including:

• The fast growth in the delivery of food and e-commerce.

• Rural India’s post-pandemic boost with increased agricultural yields and improved infrastructure.

Data for India estimates that there are 260 million two-wheeled vehicles on Indian roadways, which represents about 185 two-wheelers for every 1,000 individuals.

The graph below illustrates the increase in two-wheel ownership over the past few decades.

Current Landscape of the Indian Two-Wheeler Market

The nation's two-wheeler industry manufactured over 24 million units in FY 2025 with an estimated value of US$21 billion, according to a report from Kearney.

Of the 24 million units produced, about 20 million were sold within the country, while the remainder were exported.

The Economic Times notes that the country's two-wheeler industry is likely to see faster premiumization in both motorcycles and scooters owing to rising demand, favorable pricing dynamics, and positive consumer sentiment.

Due to favorable demographics and ongoing economic growth, the Indian two-wheeler market is predicted to expand by a 6 to 8% CAGR through 2030.

Key Market Players

The Indian two-wheeler sector is dominated by several domestic manufacturers:

Rank	Two-Wheeler OEM	FY25 Sales (units sold)	Market Share FY25 (%)	FY24 Sales Market	Share FY24 (%)
1	Hero MotoCorp	5,445,251	28.84	5,397,315	30.79
2	Honda Motorcycle and Scooter India	4,789,283	25.37	4,093,895	23.36
3	TVS Motor Company	3,301,781	17.49	2,967,164	16.93
4	Bajaj Auto	2,154,467	11.41	2,108,808	12.03
5	Suzuki Motorcycle India	982,007	5.2	847,654	4.84
6	Royal Enfield	843,058	4.47	782,897	4.47
7	Yamaha Motor	649,900	3.44	606,859	3.46
8	Ola Electric	344,009	1.82	329,947	1.88
9	Ather Energy	130,944	0.69	109,161	0.62
10	Greaves Electric Mobility	40,162	0.21	31,276	0.18
11	Piaggio Vehicles	33,375	0.18	35,888	0.2
12	Classic Legends	32,343	0.17	31,016	0.18
	Others (Including EV)	131,232	0.7	185,235	1.06
	Total	18,877,812	100	17,527,115	100

Four players collectively control over 80% of the Indian market:

• Hero MotoCorp is the biggest player with an almost 29% market share, according to ET Auto.

• Honda Motorcycle & Scooter India (HMSI) ranks second with over 25% market share

• TVS Motor is third with nearly 17%

• Bajaj Auto is fourth with 11%

Mid-sized players include Suzuki (4.8%), Royal Enfield (Eicher) (4.5% share), and Yamaha (3.5%).

The market has also witnessed the appearance of new electric two-wheeler start-ups such as Ola Electric (1.8%) and Ather (0.6%).

Impact of Electric Vehicles on the Two-Wheeler Sector

In recent years, electric two-wheelers (e-2Ws) have emerged as a rapidly rising sub-segment of India's two-wheeler market.

According to EV Reporter, EV sales in India are expected to account for 8% of the nation’s overall sales in 2025, totaling 2,270,346 units sold.

1. Tier 2 cities such as Bhopal, Faridabad, Jamshedpur, and Jaipur, with populations of 1-3 million, have demonstrated significant progress in EV adoption

2. Tier 3 cities like Datia, Gangtok, Kalyani, Kapurthala, and Kasganj, with populations of up to 100,000 people, remain in the early stages of market growth but still show great potential, according to JMK Research & Analytics.

EV Two-Wheeler Market Size and Figures

China, India, and Southeast Asia continue to be the largest two- and three-wheeler markets in the world, accounting for around 80% of global sales in 2024.

• In 2024, India sold 1.3 million electric two-wheelers of the overall two-wheeler market, according to IEA’s Global EV Outlook.

• In addition, the number of original equipment manufacturers operating in the market increased to 220 in 2024 from 180 in 2023.

• The Indian Government’s PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) policy aims to assist the rollout of 2.5 million electric two-wheelers, which represents a 1+ million increase targeted by the previous FAME-II policy.

The main growth drivers of EV two-wheeler adoption include:

1. Rising fuel costs, which make the lower operating cost of EVs attractive

2. Consumers’ greater awareness of the environmental benefits

3. The appearance of stylish, feature-rich models, especially from start-ups.

At the same time, the industry faces several challenges, including:

• Consumers' concerns regarding range and charging infrastructure

• The upfront cost of EVs could be higher without subsidies.

Which were the best-selling EV scooters in India in 2025?

Technological Innovations Shaping the Two-Wheeler Industry

1. Integration of Smart Features

Smart connectivity features are becoming more prevalent, particularly in high-end scooters and electric two-wheelers.

These include:

• Vehicle telemetry apps that provide ride statistics, battery status (in EVs), geo-fencing for anti-theft, and remote diagnostics

• Smartphone integration via Bluetooth, which enables turn-by-turn GPS navigation and call/SMS alerts while on the go

• USB charging ports

• Keyless ignition.

Some electric scooters support over-the-air software upgrades and have various ride modes that can be selected electronically to adapt to traffic conditions or to save energy.

2. Advances in Safety Technology

Due to both customer awareness and legal requirements, safety has emerged as a key area of innovation in India’s two-wheeler industry.

Authorities and producers now focus on several important safety aspects, namely:

1. Anti-Lock Braking Systems (ABS)

From January 1, 2026, all new bikes and scooters marketed in India must have Anti-lock Braking Systems (ABS) as per Ministry of Road Transport and Highways regulations. Previously, this was restricted to vehicles with engines larger than 125cc.

2. More sophisticated safety aids

Today, many high-end motorcycles feature various ride modes and traction control, which reduces wheelspin and improves grip on slippery surfaces.

3. Innovation in lighting technology

This includes LED headlamps for better night visibility and auto headlamp-on features.

4. Onboard diagnostic systems (OBD-2)

The BS-VI Phase II emission regulations (effective from April 2023) state that two-wheelers must have OBD-2, which, in riding mode, keeps track of engine performance and emissions.

5. Build quality and design safety

An increasing number of companies are also focusing on improved chassis design for stability and ergonomics that minimize rider fatigue.

Market Segmentation: Understanding Consumer Preferences

As the population moves to more economically active locations that boast more businesses and increased job opportunities, the demand for motorbikes and scooters is growing.

The latest Kearney report reveals that consumer preferences and segmentation are changing in the Indian two-wheeler market:

Electric vs. Internal Combustion Engine (ICE ) and product types

Sales of electric two-wheelers (E2Ws) have increased 3.5 times over the last three years and now account for roughly 7% of total sales, which, in terms of the 24 million total sales, represents around 1.37 million units, the Kearney report estimates.

By 2030, the number of EV two-wheeler sales is likely to reach 7 million units, with more people focusing on sustainability and the cost of ownership.

Scooters

Scooters now account for about 36% of all two-wheeler sales, up from 30% in 2015, and this growth trend is expected to continue mainly due to:

• An increasing number of women in the workforce.

• Shifting preferences of urban users.

• EV scooters becoming more readily available.

• More premium internal combustion engine scooter models.

Premium segment (motorcycles and high-end scooters)

Demand for high-end scooters and motorcycles packed with features has increased by 20%.

More attention is given to premium sports bikes (250cc - 450cc), and over the last five years, this category has increased from 6% of the overall mix to 9%.

Urban vs. Rural Consumer Demand Trends

According to Data for India, only 10% of households in rural regions have a car, with most using two-wheelers, which is why 70% of the demand for two-wheelers arises in rural areas of India.

Recent economic development in both rural and urban areas has increased the desire for two-wheelers, and the level of urbanization continues to increase.

That said, by 2030, the share of the urban population in India is predicted to surpass 40%, bringing another 65 million people into urban areas over the course of the next five years.

The graph below shows the segmentation of the two-wheeler market in India

The Future Outlook for the Indian Two-Wheeler Industry

It appears that the two-wheeler market in India will continue to develop, with some major drivers being:

1. EV adoption, along with upgrades in battery tech and evolving charging infrastructure.

   
   

2. Urbanization

As cities are flooded with vehicles, the best option for getting from A to B is scooters and bikes.

3. The incorporation of new technologies in two-wheelers

This includes ABS, complex safety aids, smartphone connectivity, and OBD-2.

Vehicles will become smarter, and producers will require talent in software development for apps, vehicle firmware, and cloud services.

4. Rise of E-commerce delivery services

Since delivery services are increasing and are highly dependent on two-wheelers for last-mile logistics, the demand for scooters and bikes will continue to grow, boosting two-wheeler sales, especially in urban regions.

5. 'Scooterization’ and premiumization

• By FY2030, the percentage of scooters, which is currently between 36 and 38%, is expected to rise to 40% or more, according to ET Auto.

• Premium motorcycle categories (150cc and above) are expected to continue to gain market share.

• According to the Open Magazine report, the movement towards premium vehicles is structural (long-term) rather than cyclical (short-term).

6. Ecosystem partnerships

In the future of India's two-wheeler industry, companies will increasingly form ecosystem partnerships to drive growth.

• Companies could collaborate with battery-swapping providers to expand their reach and create new revenue opportunities. For example, bike maker Hero has established a partnership with Gogoro to enable easy battery swaps on electric bikes.

• More companies are expected to work with ride-sharing apps to supply bikes for shared rides or deliveries, creating additional ways of raising revenue, such as renting bikes to delivery services, and allowing bike companies to become part of the entire transport system rather than simply selling bikes.

Final word

The Indian two-wheeler industry is expected to continue to grow, driven by urbanization and technological advances, among other factors.

Businesses that develop quickly, maintain cost-effectiveness, and adapt to the changing market and customer preferences will prosper.

For hundreds of millions of Indians, riding a two-wheeler will remain their preferred mode of transportation, driving both their daily journeys and aspirations.