Today, consumers are smart. They are aware of the benefits and cons that come with any purchase. With widespread information available to the consumers at their fingertips, it has given them the liberty to carefully examine and analyse how their purchase can benefit them and prove to be a good ROI over the years. Same is the case with two-wheeler market in India.

In India, the current and future market scenario of two-wheeler market are far beyond promising. Owing to their accessibility and affordability, these vehicles have long been an integral part of India’s mobility ecosystem, accounting for around more than 70 percent of all vehicles. Generally, the adoption of two wheelers in India is dependent on the escalating levels of urbanization, coupled with the inflating disposable incomes of the consumers. Though the COVID 19 pandemic created a lull in the past few years, two-wheeler retail sales are now limping back to normalcy in 2023-24.

According to TechSci Research Report “India Two Wheeler Market - By Vehicle Type (Scooter/Moped, Motorcycles), By Propulsion Type (ICE, Electric), Competition, Forecast & Opportunities, 2019-2029”, India Two Wheeler Market has valued at USD 16.63 Billion in 2023 and is anticipated to project robust growth in the forecast period with a CAGR of 10.29%. A two-wheeled vehicle, often propelled by an internal combustion engine or an electric motor, is referred to as a two-wheeler. These vehicles comprise several motorbikes, scooters, and moped models, each of which serves a different consumer demographic and function.

Popular Two-Wheeler Brands in India: What Sets Them Apart

Over the years, some Indian companies have invested significantly on their R&D, thus developing their vehicles with utmost technological advancements and latest emission standards. Understanding the basic technological mantra of some of the established two-wheeler companies in India will give us a broad outlook of where the advancement is progressing.

TVS Motor Company & Honda Motorcycle and Scooter:

TVS Motor and Honda Motorcycle and Scooter are two popular companies dominating the Indian two-wheeler market. However, TVS Motor Company has comparably a larger distribution network with around more than 9000 dealers and customers, globally, while Honda Motorcycle and Scooter India is the market leader in the scooter segment. For TVS, its “Jupiter” continued to be its best seller, followed by NTorq 125, in FY2023. Though Activa brand of Honda remains unassailable, the company experienced a decline in market share, to 44.81% from the 48.56% it had in April-September 2022.

Hero MotoCorp & Bajaj Auto:

Hero MotoCorp and Bajaj Auto are among the two most common and popular brands in India. Bajaj Auto is known to have an upper hand in terms of growth volume and revenue, Hero MotoCorp is known for its efficient inventory and sales performance. In addition, Hero MotoCorp is renowned to have the best after-sales service, in almost the entire country. Its distribution network wins over any other two-wheeler company in India. During April – September 2023, Bajaj Auto experienced a 164% growth rate, while Hero MotoCorp remained at 4%.

Yamaha & Suzuki

Yamaha and Suzuki are two popular brands in the two-wheeler market. Suzuki Motorcycle India sold 75804 scooters more in H1 FY2024 to clock 427, 816 units, which is a rise of 22%, making the market share grow from 12.73% to 15% in H1 FY2023. Yamaha’s outboard engines have a well-earned reputation for performance, reliability, and value while Suzuki engines are about 10 percent cheaper than their closest Yamaha counterparts.

Growth Prospects of Indian Two-Wheeler Market: Current Scenario

The Indian two-wheeler industry is not just big in numbers and paper statistics, it’s a high-octane suite of reliability and perfection. With many varieties and models to choose from, such as scooters, motorcycles, mopeds, and now electric vehicles, the diverse needs and preferences of customers are easily met. Since the COVID, the industry has shown a recovery, after 3 consecutive years of decline. Favorable macroeconomic and demographic trends, improvement in rural income, and rising adoption of private sector electrical vehicles are some of the many factors responsible for such fast growth.

The Premium Segment Factor:

Competition is steadily revving up for India’s premium motorcycle segment, with sales outpacing the growth rate of the entire industry. Consumers are now preferring premium segment vehicles more, over budget and economy segment. Well known Indian two-wheeler players are onto alliances with global giants to propel their brands and technology to new heights.

For instance, two-wheeler companies in India are together gearing up in search of a bigger market share in the forecast years and the best examples for it are the joint collaborations between Bajaj Auto and Triumph, followed by TVS Motor Company and BMW Motorrad. These partnerships focus on setting global benchmarks in design and Technology, ultimately driving the creation of cutting edge, high-performance motorcycles, captivating riders worldwide. Similar is the scenario for Hero MotoCorp and Harley-Davidson.

Earlier, premium segments used to start from 350cc and above, which is true when power and performance is considered. However, with cutting edge technology, innovation in engine designs, and power delivery improvements, sales of motorcycles in 150cc and above segment have skyrocketed. Leading motorcycles in the 150cc and above premium segment includes Pulsar and Avenger from Bajaj, Hornet, Unicorn, etc from Honda, FZ series from Yamaha and Apache RTR from TVS, and are some examples that fall under the premium segment yet starting from 150cc. Companies’ premium bikes in 160cc, 180cc and 200cc categories account for 15% of its two-wheeler sales and is expected to widen in the next couple of years.

Transition From BS6 to BS7: The Changing Face of Indian Automobiles

The transition from Bharat Stage 6 (BS6) to Bharat Stage 7 (BS7) engines in India represents a critical step in the evolution of the country's two-wheeler market. This shift comes as a response to the pressing need to address air pollution and reduce vehicular emissions. S7 imposes even stricter limits on the emissions of harmful pollutants such as nitrogen oxides (NOx), hydrocarbons (HC), and particulate matter (PM). By adopting these stringent standards, the government aims to curb air pollution, which has become a major public health concern, particularly in urban areas.

Its Impact On Manufacturers

The transition to BS7 engines presents both challenges and opportunities for two-wheeler manufacturers. To meet the new emission standards, manufacturers need to invest in research and development to design engines that are not only cleaner but also efficient and affordable. Achieving this balance is a complex task that demands innovation and engineering expertise. Manufacturers will need to incorporate advanced technologies into their vehicles, such as improved combustion systems, exhaust after-treatment systems, and electronic engine management. These technologies will enable engines to operate at optimal levels, thereby reducing emissions.

This transition also has implications for the manufacturing and supply chain processes within the two-wheeler industry. The sourcing of cleaner fuels and the production and assembly of BS7-compliant components are integral parts of the transformation. It is essential for the entire ecosystem, including engine manufacturers, fuel suppliers, and vehicle assemblers, to collaborate seamlessly for the adoption of these advanced technologies to be successful.

Its Impact on Consumers

BS6-compliant vehicles saw a price increase due to the costs associated with meeting those standards. A similar trend is expected for BS7-compliant vehicles, as the advanced technologies and additional components required for emission control make the manufacturing process more complex and costly. As a result, consumers may face higher upfront costs when purchasing new two-wheelers. However, the long-term benefits of BS7 engines far outweigh the initial investment. BS7-compliant vehicles are expected to be more fuel-efficient, which will positively affect the overall cost of ownership. With reduced fuel consumption, consumers will experience lower operating costs over the lifespan of their vehicles.

Additionally, the transition to BS7 is not only about compliance with emission standards; it is also a driving force behind the adoption of alternative propulsion technologies. These vehicles inherently produce lower emissions and align more closely with stringent emission standards. As a result, automakers are likely to invest more in electric vehicle technology to meet the requirements of BS7.

Two-Wheelers’ Transition To Electric Mobility: How Actual is the Electric Penetration

The entire automobile market is transforming and the shift of the Indian two-wheeler market towards electric mobility represents a transformative change, for both the country and the industrial infrastructure. India faces severe air pollution problems in many of its cities, primarily due to vehicular emissions. The transition to electric two-wheelers is a proactive step to reduce the carbon footprint, minimize exhaust emissions, and combat air pollution. Electric vehicles (EVs) produce zero tailpipe emissions, making them a cleaner and more environmentally friendly mode of transportation.

Though the shift towards electric is quite high and speedy and a large customer base does embrace electric mobility, some challenges are bound to exist. Concerns about battery life reflect the majority part of the overall consumer’s concern. This aspect further translates into lack of readiness of electric charging-infrastructures. Around 35% of consumers feel that their area requires more charging infrastructure networks. Therefore, better penetration of public chargers, with adequate safety measures can be vital to fast-track this journey.

However, consumers are willing to embrace EV and subsequent newcomer CV companies. This is evident from the fact that around 50% of the electric two-wheeler market is dominated by newcomers. Though the selection points between combustion engines and electric vehicles are customer-specific, the growing number of people adopting for electric two wheelers show good numbers.

Safety Changes/Regulations in Indian Two-Wheeler Market Post 2020

The Government of India amended the Motor Vehicle Act in 2019, introducing stringent penalties for traffic violations. Some safety measures like AHO (Automatic Headlight On) or All Time Headlight On come included in the vehicle. Inclusive of it, for rider’s safety, all helmets sold in the country are required to comply with compulsory quality control certifications (BSI & ISI).

The two-wheeler industry has also adopted innovations and new technologies to reduce the tail-pipe emissions, and brake dust and other pollutants that may be regulated under BS7.

With stricter norms, the Government of India has instructed the strict use of ABS (Anti-lock Braking System) in two wheelers. It is a mandate to have an ABS system in a two-wheeler, with engines with and above 150cc.

The use of various sensors has also been mandated as per the Government of India. These sensors help in everything from cutting the engine off when bike meets with an accident to automatically informing the rider about tire pressure, ABS lighting, tubeless tires, service reminder, and much more.

Two-Wheeler Industry Trends: Tech Trends Chasing Innovations

In India, the largest two-wheeler market dominated by commuter motorcycles. Earlier, because these motorcycles were known for their affordability, fuel efficiency and reliability, the scope for incorporating tech was always less. However, with technology improving everyday and commuter motorcycles being transformed into premium segment, loads of features are now added.

Aesthetic Instrument Cluster

Thanks to technology, the look of instrument clusters has changed significantly. With digital displays replacing analog ones, the advancements also offer gear shift indicators, fuel metrics, real time mileage, distance to empty, lap timer, service reminder, etc.

Riding Modes

While not a very significant upgrade for commuter motorcycles, riding modes used to be a feature only on superbikes (engine with and above 1000 CC). However, as a feature to entertain commuters, it has served to be a big hit for the 2W market. It allows riders to adjust bike performance characteristics according to road conditions or personal preferences.

Cruise Control

Cruise control is a great feature that often comes in mid-level motorcycles for relaxed highway cruising. In the premium segment, the feature enhances both performance and rider’s experience.

TFT Displays and Rider Aids

Full color TFT displays provide a wealth of information and customization options. In addition, premium segment performance bikes also come with wheelie control, traction controls, and adjustable suspensions to aid in high speeds.

According to TechSci Research Report “India Electric Two-Wheeler Market - By Vehicle Type (Scooter/Moped, Motorcycle), By Battery Type (Lead Acid, Lithium-Ion), By Voltage Capacity (48-59V, 60-72V, 73-96V &), By Battery Capacity (< 2 kWh, 2–2.5 kWh, > 2.5 kWh), By Range (<50 km, 50–100 km, 101–150 km, >150 km), By Region, Competition, Forecast & Opportunities, 2018-2028F”, India electric two-wheeler market is anticipated to grow at a CAGR of 29.07% during the forecast period to reach USD1,028.04 million by 2028. Anticipated growth in the market can be attributed to increasing initiatives toward green energy coupled with central and state subsidies. Rapidly increasing development of charging stations, road infrastructure and increase in battery capacity will lead to the growth of India electric two-wheeler market in the upcoming years.

The Gist

The Indian two-wheeler market stands as one of the world's largest and most dynamic, catering to a wide range of customer needs and preferences. Although it witnessed a rebound in 2022-23 after three consecutive years of decline, it still remains below pre-COVID and 2014-15 sales levels. Projections indicate that the market is poised for a compound annual growth rate (CAGR) of 9.88% from 2022 to 2028. This growth is driven by the adoption of electric vehicles, the inherent benefits of low maintenance, fuel efficiency, and the ease of handling associated with two-wheelers. We also understand that various factors tend to influence the market, including government policies and incentives, technological advancements, shifts in consumer behavior and preferences, competition from four-wheelers, and safety regulations.

However, the market also faces its share of challenges. These include the lingering impact of the COVID-19 pandemic, price increases in entry-level segments, and insufficient charging infrastructure. The market is predominantly led by five major players: Hero, Honda, TVS, Bajaj, and Suzuki, each offering a diverse array of models and features spanning different segments. The market is also evolving with the entry of new competitors and disruptive mobility services, ushering in both opportunities and threats for established players.

Thus, in essence, the Indian two-wheeler market is a complex and competitive landscape, demanding continual innovation and adaptation to meet evolving customer expectations and requirements. Despite the challenges, it holds substantial potential for growth and development in the future.