New Delhi, Jan 21 India’s two-wheeler industry recorded a sharp rebound in December 2025 up 9.5 per cent year-on-year, supported by year-end demand, policy-led affordability improvements and improving macro conditions, a report said on Wednesday.
Ratings agency ICRA said in the report domestic two-wheeler volumes is expected to grow 6–9 per cent year-on-year in domestic volumes during FY26, driven by recovery in replacement demand, urban consumption and stable rural incomes.
“The recovery in urban discretionary spending and stable rural incomes, aided by a normal monsoon and continued government expenditure” were cited as tail winds by the agency.
Retail volumes surged 9.5 per cent during the month, led by year-end discounts and pre-buying by customers ahead of expected price increases in January 2026.
Improved affordability, better financing availability and higher showroom footfalls contributed to retail momentum, particularly in entry-level motorcycles and scooters, the report said.
Electric two-wheeler sales grew 32.8 per cent YoY, with retail volumes reaching 97,744 units. However, electric two-wheeler penetration remained stable at around 6–7 per cent during 9M FY2026, indicating a phase of gradual adoption amid evolving consumer preferences and infrastructure readiness.
Wholesale volumes jumped 38 per cent YoY to around 1.5 million units in December, aided by a low base and inventory restocking ahead of the new calendar year, it said.
On a cumulative basis, wholesale volumes grew by 4.8 per cent during 9M FY2026 (April–December), reflecting a gradual recovery over the fiscal year despite intermittent demand softness.
Exports enabled the December growth as monthly volumes rose by 25.2 per cent year-on-year, while cumulative industry exports increased by 24.1 per cent during 9M FY2026. The strong performance was supported by a low base and improving demand across key overseas markets.
While December 2025 witnessed a sharp year-on-year rebound, the agency predicted a broader policy-supported recovery in FY26, with exports and gradual domestic demand normalization playing a central role.
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