New Delhi [India], January 6 : India's two-wheeler (2W) industry is expected to witness accelerated premiumization across both motorcycles (MC) and scooters, driven by sustained upgrade demand, favourable pricing dynamics, and improving consumer sentiment, noted a report by Yes Securities.
"We believe 2W industry to witness accelerated premiumization both within MC and scooters with share of sub 125cc to continue decline," stated the report.
The report notes that scooterization hit a peak penetration of 36 per cent in YTDFY26, surpassing the earlier high of around 33 per cent and signalling a lasting market shift in favour of scooters. Adjusted for unreported electric two-wheeler volumes, scooter penetration stands even higher at 38.4 per cent, the report said. Scooter volumes have outpaced the broader two-wheeler industry, recording an impressive 4.1 per cent CAGR growth from FY20-25.
The report said, "a host of conducive factors including rapid urbanization, limited public transport options, notable segment inroads into under-penetrated states like UP, Bihar, MP, Rajasthan, and the East, besides the buoyant demand from e-commerce, deliveries, and 2W taxis," have boosted sales.
Premiumisation has emerged as the central growth theme across both scooters and motorcycles.
The report highlighted that demand for higher-displacement scooters has been strongest in metros and Tier-1 cities, where 125cc scooters command 45-50 per cent share, driven by feature-rich offerings and visible value upgrades.
Motorcycles, while subdued over the past four years, are also witnessing a decisive shift toward higher engine capacities. Premium motorcycles, particularly in the >300cc category, are emerging as a key growth engine, supported by aspirational demand and new launches.
"Upper premium segment (>300cc) should see huge volumes pull led by high upgrade base," the report said.
The 350cc segment has reached an all-time high share of 5.7 per cent in overall 2Ws and 36 per cent in premium motorcycles in YTD FY26, compared to just 2 per cent and 16 per cent, respectively, in FY15.
The report concludes, this structural shift will continue, leading to a gradual decline in sub-125cc segments and reinforcing premiumization as a long-term industry trend.
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