The landscape of the Indian two-wheeler market is undergoing a transformation, heralding a shift in consumer preferences towards enhanced features and superior performance. Projections indicate that within the next three years, motorcycles boasting an engine capacity of 125cc and above are poised to surpass the traditional dominance of entry-level bikes. This paradigm shift mirrors the trend observed in the passenger vehicle segment, where sport utility vehicles (SUVs) now command a substantial portion of total sales.

While the 100-110cc segment remains significant, its growth trajectory might not match the accelerating pace of the 125cc and above category. Though the entry-level segment is not expected to fade away entirely, a gradual shift is anticipated, with the 125cc plus segment gaining prominence. A forward-looking perspective over the next three years suggests that the latter could surpass the former in market share.

Presently, over half of motorcycle sales in India originate from the entry-level category. According to data from the Society of Indian Automobile Manufacturers, the share of motorcycles with engine capacity up to 110cc witnessed a decline from 55 percent in 2021-2022 to around 51 percent in 2022-2023. In contrast, the 125cc plus segment has experienced robust growth, outpacing the overall motorcycle sales. This surge can be attributed to a maturing demand among India's youth for higher-capacity models, fuelled by aspirations for more advanced features.

The entry-level segment faced severe setbacks during the pandemic, with a sluggish recovery marked by price hikes and elevated borrowing costs. While recent indicators suggest a revival, driven by increased disposable income and improved rural sentiments, the growth trajectory remains less dynamic. Moving forward, the segment is expected to benefit from demographic factors, increased penetration, and enhanced purchasing power, albeit at a more moderate pace.

The share of the 100-110cc segment is anticipated to witness a continual erosion in the industry. The pandemic accelerated this erosion due to the segment's vulnerable customer base. While some economic relief has reached these customers, the prevailing trend indicates a proclivity towards upgrading to 125cc and subsequently to 150cc.

Leading two-wheeler manufacturers have strategically redirected their focus towards mid-size and premium segments, seeking to augment volumes and enhance overall profit margins. Collaborations with premium automakers, such as Hero MotoCorp, Bajaj Auto, and TVS Motor partnering with Harley-Davidson, Triumph, and BMW, underscore their commitment to diversifying product portfolios and meeting the evolving demands of the discerning Indian consumer.