KN Radhakrishnan stated that the two-wheeler industry will grow by 8-9 percent CAGR in the long term due to the continued benefits of reduced GST
The Indian two-wheeler industry is likely to witness a growth of 8-9 percent CAGR (Compound Annual Growth Rate) in the long term, remarked KN Radhakrishnan, CEO of TVS Motor Company. This growth rate will be supported by the momentum of reduced GST, improved infrastructure and overall rise in the economy. Speaking to analysts, Radhakrishnan stated that the first half of next finanical year (Apr-Sep 2026) is expected to be very good as far as sales growth is concerned due to the continued benefits of the GST rate cut.
“Overall, I’m a firm believer that 8 per cent to 9 per cent as a CAGR, you can look at on a long-term basis…,” Radhakrishnan said when asked about the growth prospects of the two-wheeler industry for the next financial year. The two-wheeler industry posted strong sales growth in the Q3 (Oct-Dec 2025) of this financial year.
The Q4, which is in progress, will continue to carry the sales momentum, fueled by the benefits of the GST rate cut. The Union government unveiled the GST 2.0 last year in September by slashing the tax on two-wheelers with engine capacity below 350cc to 18 percent from the existing 28 percent. “The first half of the next year (fiscal) is also going to be very good because the benefits will come into the industry,” he noted.
Though Radhakrishnan refrained from sharing an exact forecast for the next fiscal. He said, “I think you will see a robust growth in the two-wheeler even in FY27”. TVS CEO said that the reasons behind his bullish outlook are improved road connectivity in rural, urban, and semi-urban areas along as the public transport system still remains a challenge. Therefore, two-wheelers are bound to gain as they are the least affordable option of personal mobility.
he said, “The ‘self-employed’ is a good proportion in India. Given that, the best segment is two-wheelers because customers can afford it, customers can definitely use that for mobility, as well as 50 per cent of the self-income group”. TVS CEO said that the GDP is also likely to see a growth. In the current financial year, not only the two-wheeler industry but also the various other sectors will witness the benefit of the GST rate cut.
Expressing confidence that in Q4, the growth of the two-wheeler industry could be “anything upwards of 15 per cent”, which is “one of the best growth rates that we have seen”. For FY26 as a whole, he said, “…the first half has not been so great. It was only a 2 per cent growth. So, the year as a whole, you will see somewhere around 9 per cent growth…”
