Bajaj Auto expects drought to put further pressure on entry-level motorcycle demand and rural lending after the festive season, while exploring a potential route into Japan through Austrian motorcycle maker KTM.
Key Takeaways
- Joint Managing Director Rakesh Sharma expects pressure on lower-income buyers to intensify in January–March 2027.
- Bajaj’s entry-level motorcycle volumes fell even as domestic industry dispatches rose in April–September 2026.
- KTM has reached break-even, but Sharma cautioned against rushing deeper collaboration before its new management stabilises operations.
Bajaj Auto sees pressure on rural buyers
Drought in parts of Maharashtra, southern India and the Northeast could weaken agricultural incomes and make financiers more cautious about lending if crop failures affect borrowers’ ability to repay, Sharma said at a post-results media interaction in October 2026. Bajaj’s captive financing business would also need to monitor the situation.
Sharma said lower-income consumers had already been postponing purchases for two quarters and expected drought to intensify that trend in January–March 2027. Festive demand remains resilient, but he expects industry growth to moderate from the 18% recorded in April–August, while potentially remaining in double digits.
| Item | Details |
|---|---|
| Bajaj 100–110cc volumes | Down 26% to 178,794 units in April–September 2026 |
| Bajaj 110–125cc sales | Down 22% to 321,613 units in April–September 2026 |
| KTM Brazil | KTM will import and assemble motorcycles; Bajaj Brazil will market them |
Entry-level motorcycles lag the market
Domestic motorcycle dispatches rose 10% to 6.92 million units in April–September 2026. The combined 100–110cc and 110–125cc categories grew by around 5% to 4.86 million units, with their share falling from 74% to 70%. The 150–350cc categories grew by about 31%.
Bajaj’s own volumes fell in both lower-capacity categories. Sharma said the company had chosen profitability over growth in the 100cc class and acknowledged that price increases had affected volumes. He described a divide between financially secure consumers who continue to spend and households that are deferring purchases.
KTM offers a possible route into Japan
KTM has reached break-even following a liquidity crisis and management restructuring. Sharma said Bajaj supported the manufacturer through component sourcing, cost reductions and governance oversight while allowing it to operate independently.
The companies are exploring synergies in Mexico, Brazil and the Philippines. In Brazil, KTM has inaugurated an assembly operation alongside Bajaj’s facility; KTM will import and assemble motorcycles, while Bajaj Brazil will market them through its distribution network.
Sharma indicated that KTM’s existing presence in Japan could eventually provide Bajaj with an entry route without building a separate distribution network. He cautioned, however, that KTM’s new management should stabilise operations before the companies rush into deeper collaboration.
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