FY26 volume growth for the two-wheeler market is expected to be 6-9%: Report

In the current fiscal year, the domestic two-wheeler segment is anticipated to rise in volume by 6–9% annually, according to a Monday report from rating agency Icra.It stated that stable replacement demand, a rebound in urban spending, robust rural incomes facilitated by a typical monsoon, and a potential drop in GST rates might all contribute to the growth.According to Icra, the industry's forecast for FY2026 is still favorable due to favorable demand drivers, and an expected GST drop may offer more impetus to stimulate growth.According to the report, domestic wholesale volumes increased by 9% year over year to 15 lakh units in July 2025, with Original Equipment Manufacturers (OEMs) continuing to maintain robust deliveries in front of the holiday season.

However, retail volumes contracted by 6.5 per cent year-on-year last month, as tepid urban demand and heavy rainfall affected rural footfalls, which weighed on sales, Icra stated.The rating agency anticipates that the forthcoming holiday season will see a notable improvement in retail demand. It reported a robust 32% year-over-year growth in July, indicating that exports were still gaining traction. According to the report, sales of electric two-wheelers (e2W) decreased by 2% on a sequential basis in July, with volumes of 1,02,900 units sold. The penetration of e2W in the two-wheeler market as a whole stayed stable at 6-7 percent.