Two-Wheelers
v1 · draft
Summary
India's two-wheeler chain runs from metals and polymers, through a broad base of listed component makers, into a few large OEMs led by Hero MotoCorp and Honda, and out through dealer networks where lenders offer loans at the point of sale. Retail sales reached a record 21.4 million units in FY26. Electric models were about 6.5% of sales that year, and they add cells, motors and controllers to the bill of materials.
Why now
Two-wheeler retail sales came in at 21.42 million units in FY26, passing the pre-COVID peak, after a GST cut on models up to 350cc improved affordability from September. Electric models were about 6.5% of sales that year, and the government has extended its electric two-wheeler subsidy to March 31, 2028. The electric shift also brings dependence on lithium-ion cells and rare earth magnets that India has largely imported.
Value chain snapshot
| 1 | Raw Materials | Steel, aluminium, rubber and engineering plastics. | low |
| 2 | Components & Sub-assemblies | Castings, suspension, brakes, fasteners, tyres. | medium |
| 3 | Electricals, Electronics & EV Powertrain | Batteries, lighting, sensors, controllers, motors. | high |
| 4 | OEM Design & Assembly | Brand, design, engine, final assembly. | high |
| 5 | Dealers & Retail Finance | Showrooms, registration, insurance and loans. | medium |
| 6 | Aftermarket & Service | Spares, tyres, oil, batteries over the vehicle's life. | high |
Indian players
- Uno Minda (Electricals, Electronics & EV Powertrain)
- Varroc Engineering (Electricals, Electronics & EV Powertrain)
- Hero MotoCorp (OEM Design & Assembly)
- Honda Motorcycle & Scooter India (OEM Design & Assembly)
- Bajaj Auto (OEM Design & Assembly)
- TVS Motor Company (OEM Design & Assembly)
Global reference points
None listed. The chain is largely served domestically.
Non-obvious insight
The electric shift has not handed the market to new entrants: in FY26 traditional ICE OEMs held more than half of the electric two-wheeler market, TVS Motor led it, and Ola Electric, the earlier leader, fell to fifth place.
Core assumption
That household incomes, especially in rural markets, keep pace with vehicle prices as safety rules and electrification add cost.
Things to watch
- A final decision on the June 2025 draft rule requiring ABS on all new two-wheelers, including those under 125 cc, and entry-level registrations after it
- Electric two-wheeler registrations on VAHAN once the PM E-Drive allocation is used up or the scheme ends
- Whether domestic magnet production or non-China sources ease the magnet constraint on EV output
Educational research only. Not investment advice. Not a SEBI registered adviser or research analyst. Sources are listed on the full map.