The Indian two-wheeler market is showing strong growth potential. The forecast suggests a 9% growth in sales for the current fiscal year. ICRA attributes this growth to factors like rising replacement demand, recovering urban consumption, and improved rural income from a normal monsoon. A key policy development is the possible reduction in GST rates for small passenger vehicles and two-wheelers, as indicated by Prime Minister Modi. This reduction is anticipated to be implemented before the festive season, which is a crucial period for auto companies. This GST cut is designed to stimulate demand. Wholesale sales of two-wheelers in India increased by 9% to 15 lakh units in July 2025. Companies maintained good supply before the festivals. Retail sales, however, decreased by 6.5% year-on-year in July, due to weakened demand in cities and a drop in buyers from rural areas due to heavy rain. The rating agency anticipates a significant improvement in retail demand during the festivals.
