India Surpasses China in Two-Wheeler Sales

India Surpasses China in Two-Wheeler Sales India recently emerged as the world’s largest market for two-wheelers, overtaking China. This achievement, highlighted in a report by Counterpoint Research, was largely influenced by India’s surging rural demand, favorable monsoon conditions, and government initiatives aimed at rural development. In the first half of 2024 alone, global two-wheeler sales rose by an impressive 49% year-over-year (YoY), with India leading this growth at a remarkable 22% YoY increase.

The Rise of India’s Two-Wheeler Market

Historically, China’s two-wheeler market has led globally. However, India has now seized the top position, thanks to an uptick in rural purchasing power and improved accessibility across regions. Rural areas in India are experiencing rapid development, with increased road access, economic growth, and more disposable income, leading to a boom in two-wheeler sales.

Key factors include:

• Favorable Monsoon Conditions: Good monsoon seasons have supported agriculture, increased farmers’ incomes, and fueled demand for two-wheelers as a mode of daily transport.
• Government Initiatives: Rural development programs such as the Pradhan Mantri Gram Sadak Yojana have improved rural connectivity, increasing demand for two-wheelers, which are essential for short-distance travel.

Global Two-Wheeler Market Trends

Counterpoint Research noted a 49% global YoY growth in the two-wheeler market. While India, Europe, North America, Latin America, and the Middle East and Africa all reported growth, China and Southeast Asia (SEA) observed declines. India’s two-wheeler market benefitted from a strong economic backdrop and was able to capitalize on other markets’ struggles.

China, traditionally a dominant player, saw a decrease in two-wheeler demand as consumers turned to e-bicycles for their daily commutes. Southeast Asia, particularly in major markets like Indonesia, Vietnam, the Philippines, Thailand, and Malaysia, witnessed a decline in two-wheeler sales, affected by geopolitical trade tensions, restrictive lending practices, and cautious consumer spending amidst economic concerns.

Insights from Market Leaders

Senior Counterpoint Research analyst Soumen Mandal commented on India’s impressive market growth, attributing it to the rural demand surge and increasing adoption of two-wheelers for various purposes. Mandal stated that this trend marked India’s entry as a leader in the two-wheeler segment, with growth anticipated to continue as rural infrastructure expands and consumer needs diversify.

Neil Shah, Vice President of Research at Counterpoint, further emphasized the shift towards electric vehicles (EVs) in the two-wheeler sector, predicting that by 2030, four out of ten two-wheelers sold worldwide will be electric. This transition aligns with global sustainability trends, and the Indian government has already incentivized EV adoption through subsidies and initiatives.

Electric and Connected Two-Wheelers: The Next Frontier

As electrification gains momentum, the two-wheeler segment is evolving to accommodate more electric models. Shah anticipates that the electric two-wheeler sector will see the adoption of embedded cellular connectivity, a technology integral to the upcoming C-V2X (cellular vehicle-to-everything) standard. C-V2X technology will enable connected two-wheelers, providing real-time navigation, safety alerts, and vehicle diagnostics, enhancing both safety and convenience for riders.

In China, the preference shift from two-wheelers with under 125cc engines to e-bicycles signals a transformation in commuter choices. With city infrastructure tailored towards electric bikes, traditional two-wheeler sales have temporarily slowed, particularly in the electric two-wheeler segment. However, China remains a key player in the broader EV market, and the local two-wheeler market could potentially rebound if it aligns more closely with e-mobility advancements.

Regional Challenges and Market Dynamics

The Southeast Asian (SEA) two-wheeler market, which includes Indonesia, Vietnam, the Philippines, Thailand, and Malaysia, has faced headwinds. Geopolitical trade tensions have impacted import-export activities, while stricter lending criteria and economic uncertainties have made consumers cautious about discretionary spending. Consequently, two-wheeler sales in these markets have experienced a downturn, contrasting sharply with India’s positive growth trajectory.

Dominant Global Players and Emerging Brands

The top ten global two-wheeler manufacturers now account for more than 75% of global sales, with Honda continuing to lead the market. Hero MotoCorp, Yamaha, TVS Motor, and Yadea also remain key players. Among the top ten, TVS Motor recorded the fastest growth at 25% YoY, while Yadea saw a 29% decline, dropping it to fifth place. The competitive landscape reflects not only a demand for traditional two-wheelers but also a strong shift towards electric models, spurred by both consumer demand and regulatory support for environmentally friendly options.

The Indian Market’s Future Outlook

India’s dominance in the two-wheeler market signifies a growing trend that will likely continue as rural areas expand economically and infrastructural connectivity improves. Increasing disposable income, especially in rural areas, means that two-wheelers are becoming more accessible, fueling sustained demand.

Additionally, the trend towards electric two-wheelers in India is promising. Supported by government incentives, EV adoption is likely to increase as battery costs fall, and infrastructure, such as charging stations, develops. The Indian government’s EV push aligns with Shah’s prediction that by 2030, nearly 40% of two-wheeler sales could be electric.

Key Takeaways and Projections for 2030

India’s position as the world’s largest two-wheeler market highlights the changing dynamics of global transportation. The significant YoY growth in two-wheeler sales signals a wider economic uptrend and a shift in commuter preferences, which will continue to influence transportation in both urban and rural areas.

By 2030, the two-wheeler market is expected to see several transformative changes:

• Higher EV Adoption: With four in ten two-wheelers projected to be electric, manufacturers will prioritize sustainable models and related charging infrastructure.
• Connectivity Integration: The adoption of C-V2X technology will allow two-wheelers to operate with enhanced connectivity features, paving the way for safer, smarter riding experiences.
• Growing Market Competition: As brands continue to innovate, competition will intensify among market leaders and emerging players in both ICE (internal combustion engine) and EV segments.

In summary, India’s rapid growth in the two-wheeler market and its subsequent surpassing of China underscore the country’s thriving demand, driven by rural expansion, economic empowerment, and increasing EV interest. This trend positions India at the forefront of the two-wheeler industry, with further growth expected as the country strengthens its infrastructure, embraces sustainable transportation, and adopts cutting-edge connectivity technology. With such strong foundations, India is likely to retain its leadership in the global two-wheeler market for years to come.

India Surpasses China in Two-Wheeler Sales