India’s two-wheeler market is heading into a clear pause. After a strong GST-driven run, Bernstein now expects domestic volumes to grow only 2.1% in FY28, a sharp deceleration from the 9.7% growth forecast for the current financial year.
The brokerage’s revised numbers show full-year FY27 growth at 9.7%, with the second half already slowing to around 6.2%. Recovery is projected only in FY29, when wage revisions are assumed to lift household incomes and push industry growth back to 12.4%.
Domestic two-wheeler volumes grew 17% between September and March of FY26 and roughly 14% in the first half of FY27. The GST rate cut brought some new households into the market and also pulled forward replacement purchases by existing owners. That dual boost is now beginning to lose momentum.
Monthly data already show the slowdown. By August, motorcycle growth had turned negative while scooter growth moderated from earlier highs. September’s weak domestic numbers triggered a correction in several two-wheeler stocks that had previously outperformed passenger-vehicle names.
Bernstein’s replacement model is central to the forecast. Around 75% of motorcycle demand and 55% of scooter demand is estimated to be replacement-led. The GST cut raised the probability that owners of older vehicles would replace earlier. Those purchases supported FY27 volumes but leave a thinner pool of potential buyers in FY28. New-buyer demand continues to benefit from lower effective prices, yet the price advantage narrows from about 5% in FY27 to 3% in FY28 as subsequent hikes absorb part of the tax cut.