Bajaj Auto Rides Festive Demand, Sees Rebound in Southern Markets; Exports at Record High

Bajaj Auto Ltd. has reported a strong revival in two-wheeler sales in southern India during the September quarter, led by festive demand and a cut in goods and services tax (GST) rates. The region contributed about a quarter of the company’s overall sales, marking a turnaround from the slowdown seen a year ago.

Sales across central, eastern, and western India also grew in double digits, the company said at its post-earnings briefing on Friday. Management expects the momentum to continue through the December quarter, supported by pent-up demand as buyers deferred purchases to benefit from lower GST rates.

To stay competitive, Bajaj Auto reduced prices on models where GST was cut to 18% from 28%, absorbing the impact internally. The company, however, ruled out further discounts, saying it aims to maintain pricing discipline across its portfolio.

The government had earlier reduced GST on motorcycles under 350 cubic centimetres, commercial vehicles, and spare parts, while raising it to 40% from 31% on bikes above 350cc. To prevent a sharp price gap between the two categories, Bajaj Auto adjusted prices in the 390–400cc segment.

Exports during the quarter surged 36% on year to an all-time high, driven by robust demand in Africa, Asia, and Latin America — the latter recording its best-ever sales. The company shipped 80,000 commercial vehicles in the quarter, sharply higher than its usual monthly run rate of 15,000–20,000 units.

To meet the growing export demand, Bajaj Auto plans to expand its commercial vehicle capacity in two phases between December and June. It sold 60,000 units of KTM and Triumph bikes combined during Jul–Sept, split evenly between domestic and overseas markets. The newly launched KTM Duke 160 is expected to add significant volume in coming quarters.

The company also plans to consolidate its KTM business under a single listed entity, Bajaj Mobility AG, from 2026. The rebranded firm — currently Pierer Mobility AG, listed in Vienna and Switzerland — will become a subsidiary of Bajaj Auto.

Production of electric vehicles was constrained during the quarter after China restricted exports of rare-earth magnets, a key input for motors. Bajaj Auto delivered only about 80–85% of its planned electric three-wheeler output and half of its targeted Chetak two-wheelers.

“The supply situation has now stabilised, and we expect momentum on Chetak to return,” said Chief Financial Officer Dinesh Thapar. The company has redesigned its motors to use low rare-earth magnets and diversified sourcing from countries outside China.

Higher steel, copper, and rubber prices, along with spikes in rhodium and palladium, lifted input costs during the quarter, adding about 40 basis points to overall inflation. The company expects similar pressure in the December quarter but hopes better foreign exchange realisations will help offset the impact.

Bajaj Auto does not expect the same pace of growth once the festive season ends, citing pent-up demand as a temporary factor.