The Indian two-wheeler industry is witnessing a ride towards the premium segment, like other consumer sectors in the country, with the market share of premium motorcycles increasing to 19% last fiscal and expected to touch 22% by 2030, according to Crisil Intelligence.
The market share of premium motorcycles -- engine capacity greater than 150 cc -- increased to 19% last fiscal from 14% in fiscal 2019, with their volume rising to 23 lakh units from 19 lakh units, it said in a statement.
On the other hand, the market share of economy motorcycles declined to 46% last fiscal from 62% in fiscal 2019, with volume shrinking to 56 lakh units from 84 lakh units, largely due to weak rural demand and an increase in prices, it added.
Interestingly, premium motorcycle sales surpassed the pre-Covid level by 22% last fiscal, while sales of overall two-wheelers stood at 94% of the pre-pandemic level and total motorcycles at 90%, it added.
The market share of premium motorcycles is expected to climb to around 22% by fiscal 2030. The improvement will ride on favourable macroeconomic trends, increasing disposable incomes, rising global exposure of consumers and a youthful demographic, Crisil Intelligence said.
Commenting on the trend, Crisil Intelligence Director, Pushan Sharma said, "The demand-side spurs for premium motorcycles include a growing preference for these products from buyers with healthy incomes who maintained their purchasing power even during the pandemic." Shama further said, "On the supply side, it is the expanded range of options available to consumers. For the record, the number of motorcycle models available in the premium segment increased to 35 last fiscal from 23 in fiscal 2019. We anticipate these trends to persist through the next five years." On the decline of the economy segment motorcycles, Crisil Intelligence Associate Director, Mohit Adnani said, "Weak rural demand poses a major hurdle for entry-level motorcycles." Rural incomes have not increased much while there has been a steep 65-70% hike in prices of economy models to pass on the increase in costs due to the transition from Bharat Stage (BS) IV to BS VI standards, implementation of safety norms, and the commodity super cycle, he added.
"Thus, sales of these motorcycles recovered to only 67% of the pre-pandemic level last fiscal," Adnani said.
