India's entry-level motorcycle segment to remain under pressure: Bajaj Auto MD

The entry-level motorcycle segment in India has been facing the pressure of dampening sales over the last few years. This will continue in the near future, believes Bajaj Auto Managing Director Rajiv Bajaj. Reuters has reported that in an interaction, Bajaj reportedly said that entry-level motorcycle customers are unlikely to return in the near future. His comment comes right ahead of the festive season, which is generally known as the best time for any automaker across India to fetch the biggest sales volume in a year.

Along with the dampened consumer sentiment towards entry-level motorcycles in India, the traditional fossil fuel-powered two-wheeler manufacturers will also experience the pressure of consumers' increased focus on electric two-wheelers this festive season, hinted the Bajaj Auto MD. He said that the upcoming festive season would be a dull one for the traditional fossil fuel-based two-wheeler manufacturers, as the buyers are inclined towards electric two-wheelers.

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The entry-level motorcycle segment comprising the 100-110 cc models has always been the key revenue churner for any two-wheeler manufacturer in India. Bajaj Auto being a major legacy player in the Indian two-wheeler market has relied on this segment like other companies such as Hero MotoCorp, TVS and Honda. However, over the last few years, the consumers' focus has shifted towards premium models that come powered by higher displacement engines and deliver better performance. The Covid-19 pandemic, job losses and rising petrol prices too hit the segment hard.

This change in consumer perspective has put pressure on the entry-level segment. “The entry segment, which is the 100 cc motorcycle, continues to be under pressure for the industry as a whole," Rajiv Bajaj said, adding that the buyers are at the bottom of the pyramid who were hit by the Covid-19 pandemic, job losses and rising petrol price, are not coming back. The homegrown two-wheeler manufacturer currently sells seven motorcycles in the 100-125 cc segment, which are priced between ₹67,000 and ₹1.07 lakh (ex-showroom)

Speaking about the dampening demand for entry-level motorcycles, Bajaj has advocated for a disruptive action. He proposed that the two-wheeler manufacturers should develop CNG-powered motorcycles. Also, he has advocated for tax incentives for such motorcycles from the government, hoping that would galvanise entry-level customers again.