The proposed mandating of anti-lock braking systems (ABS) for all two-wheelers could push up motorcycle prices and potentially weigh on demand, but the two-wheeler industry has had a constructive and ongoing dialogue with the government to balance safety objectives with affordability, Bajaj Auto said.
Speaking to the media after the Q3 FY26 earnings, Rakesh Sharma, Executive Director at Bajaj Auto, said regulatory-led cost increases have historically affected demand, particularly in price-sensitive segments of the motorcycle market.
A draft notification published by the government in the second half of last year said that “vehicles of category L2 [two-wheelers] manufactured on and after January 1, 2026, in case of all models, shall be fitted with Anti-lock Braking Systems conforming to IS 14664:2010.” However, there has been no official update on the start of implementation.
“ABS will certainly drive up costs and could be one of the factors that threatens growth,” Sharma said, pointing out that even modest price increases can influence buying decisions in a mass-market category.
Based on recent experience, Sharma said the earlier introduction of ABS in the 150cc segment had slowed growth in that category.
“When ABS was introduced in the 150cc segment, we found that growth slowed down, while the 125cc segment, which did not have those costs at that time, did better,” he said.
Safety not in Question; Constructive Engagement with Policymakers
Despite the cost concerns, Sharma stressed that the industry is aligned with the government on the need to improve road safety and is not opposing the move.
“There has been a lot of dialogue between the motorcycle industry and the OEMs to address the rightful concerns of safety, while balancing them with costs,” he said.
He added that manufacturers themselves have a strong incentive to improve safety perception, as it directly affects consumer acceptance.
“If our vehicles are not regarded as safe, it will threaten demand. We also want our vehicles to be perceived as safe,” Sharma said.
According to Sharma, the government has been receptive to industry feedback, and discussions are focused on developing practical solutions that improve safety without significantly increasing vehicle prices.
“The ministry and other authorities have taken note of our suggestions, and there has been a very positive dialogue,” he said, adding that the industry is awaiting further clarity on how the policy will eventually be shaped.
Affordability Remains a Key Risk
Sharma cautioned that affordability remains central to sustaining demand, given the income profile of motorcycle buyers.
“The average income of our customers is around Rs 40,000 a month. Every Rs 1,000–2,000 makes a big difference,” he said.
With demand currently benefiting from low inflation and a GST-led recovery, Sharma said the risk is that regulatory or cost pressures erode those gains.
“If inflation remains low and costs are managed well, growth can be sustained. But if prices rise sharply, it will show up in demand,” he said.