2023-09-18 11:04:27
Bajaj Auto’s chief executive told CNBC-TV18 on Monday that entry-level motorcycle customers would not return “in the near future,” pointing to a gloomy holiday season for the segment traditional gasoline-powered motorcycles, as buyers consider electric options.
“The entry-level segment, i.e. 100cc motorcycles, remains under pressure for the entire industry,” said Managing Director Rajiv Bajaj in an interview with CNBC-TV18.
“Bottom of the pyramid” buyers, who were hit by the bird flu pandemic, job losses and rising gasoline prices, are not coming back, Mr. Bajaj said.
Bajaj Auto offers seven motorcycle models in the entry-level segment, between 100 and 125 cc, priced between 67,000 rupees ($805.26) and 107,000 rupees, according to the company’s website.
Two-wheeler sales reflect the financial health of India’s rural economy and demand from the country’s largest consumer segment – low- and middle-income households – which are facing a sharp rise in food prices due to to irregular monsoons.
Bajaj, whose company sells the popular Pulsar range of motorcycles, attributed the decline in interest in conventional vehicles to the rapid adoption of electric vehicles and said “disruptive action” was needed in this area.
Every time someone buys an electric scooter, they do so at the expense of not only internal combustion engine (ICE) scooters, but also motorcycles, he said.
Mr Bajaj also proposed that original equipment manufacturers develop compressed natural gas (CNG) two-wheelers with tax incentives from the government, hoping this would “galvanize” entry-level customers.
The proposal comes as the government wants electric two-wheelers to account for 70% of all two-wheeler sales by 2030, up from 14% currently.
Bajaj Auto’s monthly sales in the domestic two-wheeler market fell 31% in August, while exports rose 2%.
($1 = 83.2029 Indian rupees)
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