Two-wheeler industry to grow 8-9% CAGR in long term: TVS Motor CEO

The two-wheeler industry has the potential to grow at 8-9 per cent CAGR in the long term, drawing from the momentum of GST rate cut, government's spending on infrastructure and overall growth of the economy, according to TVS Motor Company CEO KN Radhakrishnan.

The first half of the next year is also expected to be "very good" in terms of sales growth, as the benefits of the GST rate cut will continue to come into the industry, he told analysts.

"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 fiscal on the back of strong performance in Q3.

 

In Q4, the benefit of the GST rate cut, which was implemented on September 22 last year, will be seen, he added.

"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.

While not sharing an exact forecast for the next fiscal, Radhakrishnan said, "I think you will see a robust growth in the two-wheeler even in FY27".

Sharing reasons for the bullish outlook, he said that with road connectivity in rural, urban, and semi-urban areas getting better while the public transport system remains a challenge, personal mobility, especially two-wheelers, stands to gain.

Moreover, 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".

Overall, the GDP is likely to grow, Radhakrishnan said.

In the ongoing fiscal year, he said, the benefit of the GST rate cut is playing out not only in two-wheelers but across sectors where consumers have benefited.

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...