India’s two-wheeler market is the largest of its kind in the world. Demand is driven by population, and several manufacturers have been in the game for a few decades, vying for their share of the pie. However, over the past decade or so, the market has undergone massive change. Are things really improving or are we moving backwards?
From fiscal year 2012 to 2017, Indian two-wheeler sales made small year-on-year improvements from 13.41 million units to 17.59 million units, according to a report by Statistical. In the early years, the two-wheeler market was dominated by 100cc commuters from MotoCorp Heroes, Bajaj Auto and televisionsand scooters, mainly from Honda.
Interestingly, in the previous financial year, Honda lagged behind Bajaj with 19.96 lakh units sold compared to the Pune-based bike maker’s 25.66 lakh units. But then, in the following fiscal year, demand for scooters surged, with Honda leading the charge thanks to the venerable Honda Activa interval. At the end of this exercise, the Japanese bicycle manufacturer managed to beat Bajaj. He tallied 26.06 lakh units while Bajaj followed with a tally of 24.63 lakh units.
The resurgence of scooters saw even greater heights in the financial year 2016-17 when the Honda Activa (about 27.5 lakh units) beat the Hero’s Splendor (about 25.5 lakh units) to become the country’s best-selling two-wheeler for the first time. Obviously the main growth drivers were 100-110cc bikes and scooters.
At the same time, the 150cc-160cc segment has also seen steady growth. Although their numbers were nowhere near as close to the 100-110cc heavyweights, the decade saw the introduction of several new motorcycles. Yamaha’s dominance in the 150cc performance segment with the Yamaha R15 was challenged by the introduction of the Honda CBR150R in 2012. In the 160cc streetfighter space, the Suzuki Gixxer and Yamaha FZ has new rivals in the form of the Honda CB Hornet 160R, and later the Bajaj Pulsar NS160.
2012 was also an important year for the 200cc segment. Iconic Austrian brand KTM entered the country with its successful offer, the KTM 200 Duke, in India in January. This gave enthusiasts a taste of fat bike performance levels, that too at a fairly accessible price of Rs 1.17 lakh, ex-showroom. It became KTM’s cash cow at least until the KTM 125 Duke entered the picture. At the end of that year, its partner Bajaj introduced the Pulsar NS200 at an even lower price of Rs 85,000 (ex-showroom)! It made the Pulsar NS200 the most affordable motorcycle with a liquid-cooled engine. In fiscal 2014, Bajaj managed to sell 74,000 healthy units in India of the Pulsar NS200 and Pulsar 220F combined. While these numbers are sound enough on their own, they are still dwarfed by the 6.08 lakh unit figure counted by the Pulsar range (the 150 and 180). In the same fiscal year, KTM racked up about 11,000 units in total.
Then in 2016, the 200cc segment was given a new lease of life with the introduction of the TVS Apache RTR 200 4V. Packed with performance, the RTR 200 was the perfect affordable alternative to the KTM 200 Duke and a natural rival to the Pulsar NS200.
In summary, in the first half of the last decade, the Indian two-wheeler segment was dominated by 100-110cc bikes and scooters, while the performance space was dominated by 150-160cc bikes followed by 200cc motorcycles.
From 17.59 million two-wheelers in FY17, the Indian two-wheeler space saw quite a big jump reaching 20.2 million units in FY2018. However, overall sales fell in fiscal 2019 with only 4.85% year-over-year growth. . This can be attributed to the fact that base prices for bikes in the 150cc and above segment saw a significant price increase as they had to comply with new safety regulations that came into effect from April 2019. Bikes displacing 125cc and more had to be fitted with ABS, which increased costs considerably.
As larger capacity motorcycles became more expensive, Indian manufacturers realized that the 125cc segment was ripe for the picking as it offers an excellent balance between affordability and fuel efficiency. Honda’s longtime best-selling Shine was then accompanied by the more upscale SP 125 in 2019 and 2020, Hero jumped into the fray with the update Super Splendor and the Charmboth equipped with 5-speed transmissions.
Even in the performance segment, KTM entered the 125cc space with the launch of the 125 Duke in 2018. Interestingly, it was priced at Rs 1.18 lakh (ex-showroom), which is Rs 1,000 more than the price of the 200 Duke when it was launched in 2012. This with the RC 125 became the best-selling bikes for KTM for several months after their launch.
However, things got worse from March 2020 when the Covid-19 pandemic hit. This coincided with the Indian car industry’s move to BS6 emission standards, so manufacturers were forced to update their products to comply with the tough new regulations. This led to a sharp increase in prices, not to mention the loss of performance of several products.
In 2022, geopolitical tensions between China and Taiwan, followed by the ongoing conflict between Ukraine and Russia, also led to logistical problems, a shortage of semiconductor chips and a massive increase in fuel prices. In fact, in April of this year, inflation hit an eight-year high of 7.8%, forcing consumers to rethink their vehicle purchases. The 150cc segment has also shrunk, with only the Bajaj Pulsar 150Yamaha FZ and Yamaha FZ-X offered on the market. However, the 125cc segment is as dynamic as ever, with the Honda Brilliance dominate sales. In fact, with 1.19 lakh units in April, it literally sold more than all the other 125cc motorcycles in India combined.
Given that the majority of sales come from the mobility-oriented commuter segment, the situation is unlikely to improve unless electric two-wheelers become affordable enough and offer a range rivaling ICE. This may not be possible only through subsidies, but also through more proactive financial assistance that the government will provide to Indian electric vehicle companies.
Either that or fuel prices and general inflation have to come down for people to start buying their favorite gas-powered two-wheelers again. But we know where we’re going, don’t we?