, The premium motorcycle segment, encompassing bikes above 150cc, is expected to sustain its robust double-digit growth trajectory in the two-wheeler market over the next 2-3 years. This momentum will be fueled by a blend of factors, each contributing to the segment’s rising prominence and allure among young buyers. Despite some recovery in the entry-level bike segment, supported by rising rural demand, the premium bike segment continues to outpace overall market growth. During the April-August 2024 period, premium bike segment volumes (above 150cc motorcycles) grew to 1.24 million units, from 1.07 million units in the same period the previous year. Meanwhile, the lower category (150cc and below) saw an increase to 3.87 million units during the first five months of this fiscal, compared to 3.46 million units a year ago, according to data from the Society of Indian Automobile Manufacturers (SIAM). The Indian motorcycle market has traditionally been dominated by the entry-level segment, with mass-market bikes capturing a larger portion of the customer base. A decade ago, the entry-level segment accounted for over 80per cent of total volumes. However, there has been a gradual decline in the share of entry-level and executive motorcycles in overall domestic sales. Simultaneously, the premium segment, generally defined as motorcycles with an engine capacity of over 150cc, has gained momentum. The share of premium motorcycles has been steadily increasing and the premium segment now accounts for 24per cent of total motorcycle volumes. While some consumers may have shifted from entry-level bikes to electric scooters, the primary driver of weak demand for entry-level motorcycles was the significant increase in the cost of ownership. This rise was due to new regulations and inflationary pressures, which led to higher prices. It took time for the buyers to adjust to these price hikes, resulting in subdued demand. “While weakening demand in the entry-level segment has contributed to this shift, the premium segment’s absolute volumes hit an all-time high in FY2024 and are expected to maintain strong growth moving forward,” says Rohan Gupta, Vice-President and Sector Head, Icra.
Drivers of Demand
The premium motorcycle segment is expected to grow at a robust pace, with a double-digit compound annual growth rate (CAGR) projected over the next 3-5 years, outpacing the overall motorcycle segment’s expected CAGR of around 7-8per cent. Gupta points out that several factors are driving this demand, including rising GDP per capita, increased urbanisation, a growing middle class, and favourable demographics, particularly a higher youth population. “Additionally, over 75per cent of new model launches by Original Equipment Manufacturers (OEMs) have been in the premium segment, offering a wider range of options for buyers. OEMs are anticipated to continue focusing their investments on launching premium models to strengthen their market share and capitalize on this growing demand,” he adds. Both home-grown brands, such as Royal Enfield, TVS Motor, Bajaj, and Hero, and global players like Yamaha, Honda, and others are targeting an increased presence in the premium bike market, especially in the middle-weight category, to attract a younger consumer base.