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The global two wheeler market size was valued at USD 110.82 billion in 2021. The market is projected to grow from USD 121.49 billion in 2022 to USD 217.94 billion by 2029, exhibiting a CAGR of 8.7% during the forecast period. The global COVID-19 pandemic has been unprecedented and staggering, with two wheeler experiencing lower-than-anticipated demand across all regions compared to pre-pandemic levels. Based on our analysis, the global market exhibited a decline of 6.3% in 2020 as compared to 2019.
Due to the rise in population in emerging economies and lack of parking spaces, motorcycles and mopeds have emerged as a suitable alternative to cars. They are highly affordable, irrespective of whether a person owns a car or rents one. This is represented in a better cost of service, fuel consumption, parking fees, repair cost, and mileage. Therefore, factors, such as high maneuverability, the convenience of use especially over short distances, easy bank financing solutions, and affordability, have led to increased demand for two wheelers.
COVID-19 Led to Short-Term Decline in Sales that Impacted Market Growth
The impact of COVID-19 was varied across different regions, with a few regions witnessing a decline in two wheeler sales, whereas some countries witnessed a rise in vehicle sales in 2020. For instance, North America and Europe saw a rise in motorcycle and moped sales, whereas Asia Pacific witnessed plummeting sales in 2020.
According to the European Association of Motorcycle Manufacturers, the total registrations in the five largest markets in Europe, which are France, Italy, Spain, Germany, and the U.K., fell by 37.9% in March 2020 compared to the same month in 2019. Additionally, sales deteriorated further in April 2020, when combined registrations in the largest markets fell by roughly 74.9%, with some economies witnessing an 84% to 96% decline.
Similarly, the moped segment was also equally impacted. The largest European moped markets, including Belgium, Germany, Italy, the Netherlands, Spain, Poland, and France fell by nearly 37.9% in March 2020 on a year-on-year basis. Moreover, moped registrations in the same markets decreased by 55.1%.
Hence, both North America and Europe witnessed the negative impact of COVID-19 in Q2 2020. However, these markets recovered rapidly with relaxed lockdown restrictions. In North America, total two wheeler sales volume grew by 21.60% in 2020 compared to 2019. Similarly, for Europe, the total sales volume grew by nearly 5% in 2020.
The market recovery was further aided by increasing demand for electric 2Ws due to government subsidies, tax benefits, and rising climate change-related concerns. Moreover, adopting these vehicles for short-range travel and commuting to avoid unnecessary social interactions will further positively influence the two wheeler market growth in the long term.
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Developing Safety Solutions for 2W through the Vehicle-to-Everything (V2X) Connectivity to Augment Growth
V2X can offer protection by assuring that motorcycles and scooters get noticed by drivers. A small, simple beacon transmitter will be required to indicate trajectory, location, and speed. The transmissions are received by the vehicle’s communication device, and if a two wheeler is at risk, the driver is alerted, even when the view of the vehicle is obstructed.
The Connected Motorcycle Consortium (CMC) is an important organization working on a Basic Specification for motorcycle-specific V2X connectivity systems. For instance, CMC launched this ‘CMC-Basic Specification’ on Dec 11th, 2020. The Basic Specification is the first step to describing the function of motorcycle V2X systems.
This industry realized that V2X could give bikers digital visibility and significantly reduce risks. CMC has already made progress in several motorcycle-specific use cases, fine-tuning V2X messages, and experimenting with special antennas focusing on safety solutions. In December 2020, Commsignia, a major provider of OBU and RSU units and V2X software, joined CMC, emphasizing the rising demand for V2X solutions for two wheeler drivers.
Motorcycle manufacturers in CMC (BMW Motorrad, Honda Motor Co., Ltd., KTM AG, Yamaha Motor Co. Ltd, Suzuki Motor Corporation, and Triumph Design Ltd.) signed an agreement in December 2020 to continue cooperation from 2021 onwards to enhance motorcycle safety. Hence, these factors will positively influence the growth of the market.
Rapid Urbanization Coupled with Traffic Congestion to Drive Market Growth
The population in urban areas is growing rapidly. According to the United Nations Conference on Trade and Development (UNCTAD) Handbook of Statistics, global urban population percentage rose from 51.6% in 2010 to 56.2% in 2020. The share of the urban population has increased rapidly in the previous decade. It is generally higher in developed economies (around 79.2% in 2020) than in developing economies (approximately 51.6% in 2020).
It is witnessed that over the previous decade, urbanization has been most pronounced in developing regions such as Asia and Oceania. Additionally, according to the United Nations (UN) Department of Economics and Social Affairs, nearly 68% of the world population is anticipated to live in urban areas by 2050. The problems associated with this rapid urbanization are high population density, road traffic congestion, lack of parking spaces, inadequate mobility infrastructure, climate changes, and others.
Therefore, increasing demand for compact mobility solutions in developed and developing economies due to challenges, such as road congestion and lack of parking spaces, among other issues, will fuel the growth of the market.
Rapidly Increasing Fuel Prices are Shifting Consumer Preference from Four Wheelers to Two Wheelers
Gasoline prices witnessed a sharp increase from April 2021 to March 2022. For instance, in the U.S., gasoline prices increased during that period by 51%. Whereas, in Canada, the increase in gasoline prices was 52%. For Germany and the U.K., gasoline prices rose by 55%, and for France, the increase was 50%. In Spain, the increase in prices was 58%. In Sri Lanka, it was 55% and in India, the increase in gasoline fuel prices was 5%.
Most of the populace in urban areas utilize four wheelers, such as sedans, compact cars, SUVs, and other four-wheelers, for their long-range transportation, daily commute, and other travel-related activities. However, two wheelers provide significantly better fuel economy compared to four wheelers.
Therefore, a sharp surge in gasoline price is likely to shift the urban and rural populace's preference from adopting four-wheelers to mopeds and motorcycles for superior fuel economy and low maintenance. Hence, these factors will drive the growth of the market.
Rising Safety Concerns Regarding Riding 2W to Limit the Market Growth
Four-wheelers, such as sedans, SUVs, and other cars, provide more comfort, safety, and convenience than motorcycles and mopeds. Therefore, the populace prefers four-wheelers for long-distance rides. For instance, four wheelers are equipped with various safety devices, such as airbags, seat belts, and other safety equipment, which activate and ensure the driver's and passengers' safety. In contrast, motorcycles and mopeds have the least protective features for the riders, with minimal inbuilt safety-related parts and devices. Hence, increasing safety concerns are likely to restrain the market growth during the forecast period.
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Motorcycle Segment Held Largest Share of Market Supported by Wide Variety Available in Different Regions
Based on type, the market is segmented into motorcycle and moped.
The motorcycle segment held the largest market share in 2021. The key producers present in India, Indonesia, and China manufacture entry-level motorcycles, which are smaller, whereas the U.S. producers manufacture large (600+ cc engine capacity), more expensive motorcycles for recreation.
Compared to the U.S. producers, several EU countries and Japan manufacture a wider range of products, from heavyweight motorcycles for sport and tourism to lightweight motorcycles for transportation. The rising disposable income per capita in developing countries has made it more accessible to buy these. Easier auto financing and the presence of low-cost brands have enabled a higher percentage of the population to purchase new vehicle.
Motorcycles are extensively used in India and China for food and goods delivery services. They are also used as self-drive rentals and bike taxis, propelling the growth of this segment.
The moped segment is anticipated to exhibit promising growth during the forecast period. The lack of mopeds in North America is attributed to the way road infrastructure is built and the culture emphasizing cars.
However, many Asian and European cities are moped-friendly, with better regulation for mopeds, smaller roads, and overall denser. Mopeds are replacing cars in these regions as they are a more affordable option.
ICE Segment Dominated the Market Owing to Better Performance
Based on technology, the market is segmented into ICE and electric.
The ICE segment dominated the market in 2021. Regular price hikes over the last two years have delayed two wheeler (2W) sales recovery. Moreover, high fuel prices will also affect recovery as petrol prices are at an all-time high. 2W powered by IC engines will still exhibit positive volume growth owing to challenges associated with the electrification of motorcycles with a displacement of more than 125cc.
ICE 2W demand is still consistent in high-volume countries such as India, China, and other Southeast Asian countries as the relatively cheap electric mopeds available in these regions are not comparable in terms of performance (range per charge, power, and time taken for charging). Hence, these factors will lead to a dominant share of ICE 2Ws in the market.
The electric segment is also expected to witness promising growth during the forecast period. Electric (e-2W) sales are driven by rising Gross Domestic Product (GDP) per capita, government policies, population growth, and urbanization. Two and three-wheelers are the dominant modes of transportation in Asian countries. Hence, there is considerable potential for electrification on a large scale.
For instance, e-2W registrations increased by 20.7% and 51.5%, respectively, in 2020 and 2021 in Asia Pacific. Similarly, sales increased by 21.7% in 2020 in Europe. Hence, these factors will positively influence the growth of the segment.
An Infographic Representation of Two Wheeler Market
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Asia Pacific dominated the two wheeler market share (with India and China accounting for the majority of the share), and it stood at USD 80.12 billion in 2021. The concerns around COVID-19 infection on mass transit, traffic congestion, and the rise of single-person households in Asia have led to high demand for low displacement mopeds and motorcycles in the last two years. Increasing penetration of these vehicles is also creating the need for new legislation. For instance, in Vietnam (the fourth largest market in Asia in terms of volume sales), the capital city of Hanoi is planning to ban motorbikes across all of its core districts after 2025 to curb emissions. These factors will influence the growth of the market.
Europe is expected to show significant growth in the market. 2W registrations in five of the largest European markets (the U.K., Spain, France, Italy, and Germany) increased by 7.8% compared to 2020. According to Antonio Perlot, Secretary-General of the European Association of Motorcycle Manufacturers (ACEM), even if the motorcycle and the moped segments are considered separately, each had a higher number of registrations in 2021 compared to 2019. Demand for electric models is particularly high, with electric motorcycles witnessing a year-on-year growth of 50.5% and 28.2% in the five major markets (France, Germany, Spain, Italy, and the U.K.) and electric mopeds recording an increase of 13.4% and 23.3% in five major markets (France, Italy, Spain, Belgium, and the Netherlands) in 2020 and 2021, respectively.
North America is expected to exhibit a moderate growth rate during the forecast period. In the more mature markets of the U.S. and Canada, consumer preference is still for larger highway cruisers. Motorcycle sales have been largely stagnant over the past decade. However, in the U.S., the post-pandemic consumer inclination toward recreational and power sports activities led to an unexpected rebound in motorcycle and scooter sales. These factors will propel the growth of the market in North America.
Honda Holds Largest Market Share Owing to Diverse Product Portfolio and Geographic Footprint
Honda is a leading motorcycle and scooter manufacturer dedicated to expanding its product range and electrification lineup to cover a more extensive urban customer base. India is Honda’s largest market. India is also the most significant production hub for Honda, with a total capacity of 6.4 million units. Whereas, the company also has a 5.8-million-unit capacity in Indonesia. Therefore, Indonesia is Honda’s one of the largest scooter markets. The company plans to launch multiple e-2W models in the next three years to expand the business and keep up the growth momentum. Moreover, it is also planning to penetrate the high-growth 250 CC plus motorcycle market. These factors will positively influence Honda’s leading position in the market.
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The global market report covers a detailed market analysis. It focuses on key aspects such as leading companies, product types, and leading product applications. Besides this, the market research report offers insights into the market trends and highlights key industry developments. In addition to the factors mentioned above, the report delivers an in-depth two wheeler market analysis of several factors that have contributed to its growth in recent years.
Value (USD Billion) & Volume (Thousand Units)
Fortune Business Insights says that the global market size was USD 110.82 billion in 2021 and is projected to reach USD 217.94 billion by 2029.
In 2021, the Asia Pacific market size stood at USD 80.12 billion.
The market will exhibit a promising growth rate of 8.7% CAGR during the forecast period (2022-2029).
The motorcycle segment held the largest share of the market in 2021.
Factors, such as rapidly increasing fuel prices and high congestion in urban cities, are expected to drive the market growth.
Honda Motor Co. Ltd., Yamaha Motors Co., and Hero Moto Corp are the major players operating in the global market.
Asia Pacific held the largest share of the market in 2021.
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