New Delhi [India], January 6 (ANI): 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.

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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.

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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. (ANI)

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