Surge in Two-Wheeler Sales in FY 2026 Driven by Urban Demand and Premium Segment: Report

New Delhi, May 2: The Indian auto sector has shown signs of recovery during the fiscal year 2026, although this improvement has not been uniform across all segments. According to a new report, demand in urban areas and a growing preference for premium vehicles have propelled this recovery, while rural demand remains somewhat weak.

As per Deloitte India’s report, two-wheelers played a significant role in this recovery, with wholesale sales increasing by 10.7% year-on-year and retail sales rising by 13.4%.

In the passenger vehicle segment, the trend for premium cars continued, with the mid-size entry segment gaining market share, while the traditional entry-level segment faced a decline.

The commercial vehicle segment also saw improvement, growing at a rate of approximately 12.6%. This increase was driven by infrastructure activities and the demand for replacing older vehicles.

The report noted, “The pace of electric vehicle (EV) adoption is increasing, but it remains uneven. Limited access is still a challenge due to costs and infrastructure shortages.”

In the two-wheeler market, demand for premium motorcycles surged by 40.7%, while scooter demand rose by 18.5%. Electric two-wheeler sales increased by 21.8%, but the overall EV market share only reached 6.5%.

Kerala led in EV adoption with 14.1%, while Karnataka and Odisha also experienced good growth. In Maharashtra, despite an increase in sales, the market share fell to 9.2% as demand for traditional engine vehicles rebounded.

The report indicated that changes in GST and price reductions in the latter half of FY 2026 made motorcycles under 350cc more affordable, bringing their prices closer to commuter bikes.

Overall, demand for entry-level vehicles across the auto sector remained under pressure, while urban markets sustained growth through premium and feature-rich vehicles.

The report also mentioned that the India-Europe Free Trade Agreement and new EV policies could further strengthen this sector in the future.

In the passenger vehicle segment, improvements were noted as companies balanced sales growth, with customers opting for better and premium options within their budget.