‘Mileage no longer the sole focus for 2W buyers’ - Rakesh Sharma, ED, Bajaj Auto

The resurgence in India’s two-wheeler industry after the pandemic-induced weakness is particularly striking, with demand for larger engines witnessing a strong surge. As consumers trade up to higher-capacity models, the industry is not only expanding in volumes but also elevating its standards.

This shift towards premium models is a testament to the maturing market. A new generation of riders, driven by a thirst for power, style and cutting-edge technology, is redefining two-wheeler ownership. With higher aspirations and purchasing power, consumers’ preferences are evolving—they are moving beyond the mileage factor to features and performance.

Given India’s rising population, low vehicle penetration, robust economic recovery, expanding road infrastructure and improved access to retail finance, the future of the country’s two-wheeler industry appears bright.

In an exclusive interaction with Autocar Professional, Bajaj Auto’s executive director, Rakesh Sharma, shares his insights into emerging trends, the electric vehicle market, the two-wheeler industry’s exports and Bajaj Auto.

Could you provide an overview of the Indian two-wheeler market in 2024? Also, how did Bajaj Auto perform this year? 

The industry has been on a smart recovery path since the low of the Covid years, and we are now seeing three years of sustained growth. In FY24, the motorcycle industry grew by about 9%, though it still has not hit the peak of FY19.

Having said that, the industry’s quality is better in terms of the higher cc segments performing better and driving growth. In FY19, the motorcycle industry was split about 58:42 between 100cc and 125cc+ bikes.

By FY24, this ratio has changed to 47:53, respectively. This is a healthy trend, signalling that up-trading forces are at play. Bajaj Auto grew overall by 18% in FY24 and by 34% in the 125cc + segment, which is the segment we are focusing on.

This year’s festival season saw record-breaking demand. What is your assessment of the sustainability of this growth through the remainder of the year? 

This festive season finished up rather nicely after a slow start. This has obviously lifted the whole year’s performance. We expect the industry’s full-year growth to be around 8% and for the 125cc+ segments to continue to grow faster.

With the entry-level segment (100cc) under pressure and the 125cc+ categories gaining traction, how do you see the 100cc segment evolving in the coming years? 
As mentioned earlier, the phenomenon of the “upper half” of the industry— the 125 cc+ segments—growing faster than the “lower half” for over 5-6 years should continue. In part, it reflects the improving economic conditions, the role of retail finance and the youthfulness of the customers. People are moving beyond the singular focus on “mileage” to consider performance, style and functionalities.

What growth rate do you anticipate for the Indian two-wheeler market in 2024? What are your expectations for market momentum in 2025?

Several positive drivers for the industry should sustain growth over the longer term—the demographic of our population, the expanding road network, the advancing penetration of retail finance, and the economic recovery after Covid now reaching all segments of customers. Hence, we see this growth momentum sustaining and the industry finally crossing the previous high of FY19. 

Having said this, short and sharp interruptions precipitated by economic or political disturbances are a feature of our times. Hence, the growth path may not be linear, but the trajectory, for sure, is pointing upwards. 

Has the demand for the Pulsar portfolio, KTM and Triumph products continued to outpace the mainstream market in 2024? Do you expect this trend to be sustained?

The Pulsar family has done exceedingly well. We had record sales of 2,70,000 Pulsars in just the 36 days of the festival season.

Similarly, KTM has thus far had its highest-ever sales, and Triumph got off to a nice start, where our focus has been on creating a brand channel platform to drive higher volumes subsequently.

However, I think that at the very premium end, say, above Rs 2.75 lakh-3 lakh pricing, the market tends to get narrow and can be or should be bigger. This will require both soft and hard investments to develop motorsports and adventure sports.

How did Bajaj Auto perform in exports during 2024? With Indian brands expanding their global footprint, how are international consumers responding to new Indian models? 

FY24 was a difficult year for our international business, largely due to the macroeconomic headwinds faced by several of our key markets like Nigeria, Bangladesh, Kenya, etc. The sharp devaluation of currencies in emerging markets has led to inflation and even impacted the availability of USD for imports.

However, FY25 has been a period of recovery, with each month being progressively better. LatAm recovery has been wonderful, with double-digit growth. Africa, too, is improving but needs to be watched carefully.

Indian brands are now quite well-accepted in most parts of the world. The performance of our products, the digital access of customers to Indian propositions and, indeed, the strong efforts made by our industry have popularised Indian motorcycle brands. We can be truly proud as a country that we are recognised as a strong force in this industry, and our brands possess a global franchise.

What is your view on the EV market’s growth trajectory, especially after the subsidy regime shift? Is India prepared to sustain EV growth without subsidies? What market share do you envision for EVs by 2030?

EVs are here to stay in the two-wheeler and three-wheeler segments. Customers are drawn to them due to the economic benefits as well as other conveniences—and despite certain uncertainties. They are firmly in the consideration set of any two-wheeler or three-wheeler buyer.

The reduction in cell costs has been helpful in mitigating the higher costs of EVs and buttressing the impact of subsidy withdrawal. Hence, even in the scenario of zero subsidy, we envisage that the EV market will continue to grow, albeit at lower rates. 

EV penetration is 5-6% in two-wheelers and about 15-17% in scooters; this should keep increasing but will not be a full replacement for ICE vehicles. We believe that due to the multiplicity of use cases and government initiatives, a country like ours needs different fuel systems to balance the needs of the customer, the impact on the environment and the pressure on the exchequer. Already, our three-wheelers offer CNG, petrol, diesel, LPG and electric options and will soon offer ethanol. Now, over 40% of our domestic revenues are driven by “green fuels”, viz electric and CNG.

Could you share your experience with CNG-powered bikes? Have they met your expectations, and is there a roadmap to expand this technology across other segments?

Our CNG bike, the Bajaj Freedom, has got off to a great start. We are actually overwhelmed by the widespread interest in the bike from the entire spectrum of customers. Since we started supplies in August, we have retailed almost 40,000 bikes, and our greatest satisfaction is that they have delighted the customers by not only halving their fuel bill but also reassuring them of a range of 300+ km through the bi-fuel technology, safety, comfort and a distinctive style. All in all, acceptance is very good, and customers have come to our fold from different segments, indicating a mass appeal for the proposition.

We are present in all 350 towns that have a CNG network. We are working closely with gas distribution companies to improve the experience for our customers at CNG stations, and the word-of-mouth from early adopters is very good. So, now, we will work towards deepening the presence in these areas by engaging with a larger majority. We will also open select overseas markets in the next few months.

How is Bajaj Auto’s collaboration with KTM and Triumph progressing? What are the next steps in this partnership, including new models, markets, or further expansions in India?

KTM had the highest-ever [sales] year in FY24 and continues to strengthen its brand, channel and customer franchise. Several upgrades have been made in the recent past, particularly in the Duke 200 and 250 range, which seem to have been accepted well.

By the beginning of FY25, we expect to expand the portfolio and engage with more of the market. A conscious attempt is being made to develop the sports and adventure segments in a fundamental way. Hopefully, this will yield results over the medium term in expanding the segment.

Similarly, in Triumph, the focus has been to set up the network to very high standards. We now have 120 top-class stores; the portfolio has also been expanded with the addition of the Speed T4 in October to engage with the class of customers who are attracted to modern classics but prefer an easier riding experience. The portfolio will be further expanded next year to develop new sub-segments, while the network will be continuously but judiciously expanded. 

How did Bajaj’s three-wheeler and quadricycle business perform in 2024? What are your growth expectations for this segment in 2025? 

The three-wheeler business had a very good year. We retained our very high market shares of over 75% in three-wheelers and over 80% in the CNG three-wheelers segment. The expansion of the CNG network enables the expansion of CNG three-wheelers, which has been very good for us, as CNG is replacing diesel, where our shares were historically lower.

The advancement of the EV business is opening up territories restricted for ICE three-wheelers. So, in a way, this is giving us new business. We have also noticed a trend of e-rickshaws upgrading to three-wheelers [electric autorickshaws], and that is a healthy sign, which makes us quite optimistic about the EV segment in three-wheelers. We will be expanding our portfolio in the next few months and upgrading our sales and service network, too.