Retail sales grow 2.2% amid weather disruptions and GST-linked purchase deferrals.
22 Sep 2025 | 2091 Views | By Shruti Shiraguppi
Domestic two-wheeler wholesale volumes increased 7.2% year-on-year to 1.8 million units in August 2025, according to industry data, as original equipment manufacturers maintained dispatches ahead of the festive season while retail sales grew a modest 2.2% due to excess rainfall and purchase deferrals linked to GST rate cuts.
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Domestic two-wheeler wholesale volumes increased 7.2% year-on-year to 1.8 million units in August 2025, according to industry data, as original equipment manufacturers maintained dispatches ahead of the festive season while retail sales grew a modest 2.2% due to excess rainfall and purchase deferrals linked to GST rate cuts.
The two-wheeler industry demonstrated continued resilience with wholesale volumes showing robust sequential performance as OEMs prepared inventory for the upcoming festive season. However, retail offtake faced headwinds from weather disruptions and consumer behavior changes following recent policy announcements.
Retail sales growth was constrained by excess monsoon rains across key markets and purchase deferment as consumers awaited the implementation of GST rate reductions. Despite these challenges, retail volumes are expected to accelerate during the festive season as demand traditionally picks up during this period.
The electric two-wheeler segment recorded retail volumes of 104,725 units in August 2025, registering sequential growth of 1.8%. Electric vehicle penetration in the overall two-wheeler segment maintained its range of 6-7% on a monthly basis, indicating steady adoption rates in the emerging category.
Export performance remained strong with monthly volumes reporting growth of 27.5% year-on-year, continuing the positive trend observed in recent months. This export momentum has provided additional support to overall industry volumes.
ICRA, the rating agency, projects domestic two-wheeler volumes to grow 6-9% year-on-year in FY2026. The forecast is underpinned by steady replacement demand, expected urban demand recovery, healthy rural incomes supported by normal monsoon conditions, and the recent GST rate reduction that is anticipated to improve affordability and stimulate consumer demand.
The industry outlook reflects optimism about multiple demand drivers converging to support volume growth in the coming fiscal year, with both policy support and seasonal factors expected to provide momentum to the two-wheeler market.