TVS Motor Expects Moderate Growth in India Two-Wheeler Industry for FY2027

TVS Motor Company expects the Indian two-wheeler industry to maintain positive momentum in the financial year 2027, although growth is likely to moderate after the sharp recovery recorded last year. The company believes demand conditions remain stable across several product categories, especially scooters, electric vehicles, and premium motorcycles. Industry volumes had crossed pre-pandemic levels in the previous financial year following the GST reduction that lowered vehicle prices and improved affordability for consumers across urban and rural markets in India.

According to TVS Motor CEO KN Radhakrishnan, the company is anticipating healthy single-digit growth for the industry during FY2027 despite macroeconomic concerns. He noted that scooters are expected to continue their strong momentum, while electric vehicles and premium motorcycles are also likely to witness healthy demand. However, the economy motorcycle segment may remain under pressure due to inflationary trends and cost-sensitive customer behaviour. He stated that TVS Motor has relatively lower exposure in the economy category compared to other segments.

The Indian two-wheeler industry posted strong performance during FY2026, with overall volumes increasing 26.4% year-on-year to reach 21.71 million units. Motorcycles accounted for 13.06 million units after recording 6.6% growth, while scooter sales rose 18.5% to 8.12 million units. Industry executives attributed the recovery largely to the GST reduction introduced last year, which reduced ownership costs and stimulated fresh demand, particularly in the entry-level motorcycle and scooter categories.

India Two-Wheeler Industry FY2026 Performance

The industry recorded significant growth across motorcycles and scooters during FY2026, supported by lower vehicle prices and stronger urban mobility demand.

Executives across the industry indicated that retail demand has remained resilient despite concerns surrounding inflation and geopolitical uncertainties linked to the conflict in West Asia. Automakers stated that vehicle demand has not yet experienced any significant disruption because fuel prices have largely stayed stable in recent months. However, manufacturers continue to closely monitor crude oil trends, commodity prices, and global supply-chain developments that could influence production costs and consumer affordability during the year.

Radhakrishnan highlighted that rising prices of steel, aluminium, crude oil derivatives, and other raw materials remain key challenges for the industry. He also pointed to input-cost inflation and supply-chain disruptions as major concerns for manufacturers heading into FY2027. Despite these pressures, he stated that supply-chain conditions are gradually improving and operational stability is returning across several supplier networks. The company expects the continuation of GST-related demand benefits to support overall industry momentum in the coming quarters.

The company expects scooters, premium motorcycles, and electric vehicles to remain the primary growth engines for the market. Increasing urban mobility requirements and wider acceptance of electric scooters are expected to sustain demand growth in these segments. On the other hand, demand in the economy motorcycle category may weaken if inflation remains elevated or if fuel prices witness a sharp increase. Manufacturers believe affordability concerns could continue influencing purchasing decisions among price-sensitive consumers.

Hero MotoCorp and Bajaj Auto have also projected moderation in industry growth during FY2027 following the sharp rebound seen last year. Both companies expect the sector to expand in the mid- to high-single-digit range as the market enters a more stable demand cycle after recovering strongly from earlier disruptions. Industry participants remain cautiously optimistic as they balance growth opportunities in premium and electric segments against inflationary and supply-chain risks.

Frequently Asked Questions

What growth does TVS Motor expect for India’s two-wheeler industry in FY2027?
TVS Motor expects the Indian two-wheeler industry to record healthy single-digit growth during FY2027 despite inflationary pressures and supply-chain concerns. The company believes scooters, electric vehicles, and premium motorcycles will continue driving overall market demand. However, growth in the economy motorcycle segment could remain weaker due to rising costs and affordability challenges. Industry executives also expect demand conditions to stay stable if fuel prices remain under control and supply-chain conditions continue improving throughout the year.

Which vehicle segments are expected to drive growth in the Indian two-wheeler market?
Scooters, electric vehicles, and premium motorcycles are expected to remain the key growth drivers in India’s two-wheeler market during FY2027. Rising urban mobility needs, increasing consumer acceptance of electric scooters, and stronger demand for premium products are supporting these segments. Manufacturers believe these categories will continue outperforming the broader market despite inflationary challenges. Meanwhile, entry-level motorcycles may face slower demand growth because price-sensitive consumers could be impacted by higher fuel costs and increasing ownership expenses.