In a recent interview with CNBC-TV18, Bajaj Auto’s Managing Director, Rajiv Bajaj, shared his insights on the challenging prospects for entry-level motorcycle buyers in India. This analysis highlights the changing landscape of India’s motorcycle market and the factors contributing to its uncertainty.
The Entry-Level Motorcycle Conundrum
Bajaj Auto, a prominent player in the Indian motorcycle industry, anticipates a prolonged absence of entry-level motorcycle buyers in the foreseeable future. Rajiv Bajaj expressed his concerns, particularly regarding the traditional fuel-based segment, as consumers increasingly consider electric alternatives.
Challenges for the 100cc Motorcycle Segment
In the interview, Rajiv Bajaj acknowledged the continued pressure on the 100cc motorcycle segment, affecting the industry as a whole. He noted that buyers situated “at the bottom of the pyramid,” who faced the economic hardships brought on by the COVID-19 pandemic, job losses, and soaring petrol prices, are showing no signs of returning to the market.
Bajaj Auto’s Entry-Level Motorcycle Offerings
Bajaj Auto currently offers seven motorcycle models in the entry-level segment, ranging from 100cc to 125cc, with prices spanning from 67,000 rupees ($805.26) to 107,000 rupees. This diversified portfolio caters to various consumer preferences within this segment.
Two-Wheeler Sales as an Economic Indicator
Sales of two-wheelers in India have long served as an indicator of the country’s rural economy’s financial health and the overall demand from lower and middle-income households. Currently, this segment faces challenges related to rising food prices due to erratic monsoons.
The Rise of Electric Vehicles
Bajaj attributed the declining interest in conventional vehicles to the rapid adoption of electric vehicles. He emphasized the need for “disruptive action” in response to this trend. Every purchase of an electric scooter, according to Bajaj, not only impacts internal combustion engine (ICE) scooters but also motorcycles.
A Call for Compressed Natural Gas (CNG) Two-Wheelers
Bajaj also proposed a solution to stimulate the entry-level motorcycle market. He suggested that original equipment manufacturers (OEMs) should develop compressed natural gas (CNG) two-wheelers, with government-backed tax incentives. This move, he believes, could revitalize interest among entry-level customers.
Government’s Push for Electric Two-Wheelers
The Indian government has set ambitious goals for the electric vehicle (EV) industry, aiming for EVs to constitute 70% of all two-wheeler sales by 2030, a significant increase from the current 14%.
Bajaj Auto’s Sales Performance
In August, Bajaj Auto reported a 31% decline in its monthly domestic two-wheeler sales, while its exports witnessed a 2% increase. These figures underscore the shifting dynamics within the Indian motorcycle market, driven by changing consumer preferences and economic conditions.
As the motorcycle industry in India navigates these challenges, it remains to be seen how OEMs and policymakers will respond to the evolving landscape, ensuring sustainability and growth in this ever-changing market.
