India's two-wheeler industry is experiencing its fastest growth pace in years, but the traditional entry-level motorcycle segment is showing clear signs of strain. According to first-quarter FY27 earnings commentary from Bajaj Auto and Hero MotoCorp, the 100cc-125cc motorcycle category that has long anchored volumes for India's top makers is losing ground. Bajaj Auto's joint managing director Rakesh Sharma was the most direct on the trend, telling analysts that the 100cc and 125cc segments were growing at low-single digit numbers even as the 150cc-250cc range expanded over 20%. Hero MotoCorp CEO Harshavardhan Chitale described a more mixed picture, acknowledging that '125cc and above are growing faster,' with the company's own market share gains concentrated in the higher segments.
Sharma linked the divergence to income inequality within the customer base, stating that 'the upper half of the society are economically much, much stronger and the people down the pyramid have weakened,' a dynamic he said was now visible in how different engine-capacity segments were performing. As reported by Bajaj Auto, the segment's share of the overall motorcycle market has fallen from 55% to around 46% over the past five to seven years. The company is prepared to let its 100cc market share erode rather than compete purely on price, with Sharma saying the company would 'participate in it at our own terms' and was willing to accept share losses 'when growth and profitability... start getting into a conflict situation.'
According to Bajaj Auto's commentary, the company would 'participate in it at our own terms' and was willing to accept share losses rather than compete purely on price. The company's strategic focus has shifted to the 125cc-plus range, where Bajaj plans to launch two new Pulsar models and roughly ten variant refreshes within six weeks, alongside two entirely new brand nameplates in the 125cc segment later in the fiscal year. Hero MotoCorp disclosed that it had taken a tactical price cut on certain HF Deluxe variants in select states to draw in first-time buyers, a move that CFO Vivek Anand and business unit heads said had produced an 'immediate boost' in demand at the entry level. Analyst Sonal Gupta of HSBC Mutual Fund pointed out that Hero's overall Vahan (registration) market share had actually declined around 150 basis points year-on-year despite the company's broader 23% volume growth.
Both companies tied the entry-level softness to affordability pressure following a run of price increases. Hero MotoCorp said it had taken a cumulative 4.5% blended price increase across ICE models since late February, even as commodity costs forced further increases in July. Bajaj's CFO Dinesh Thapar described a 'hyperinflationary' commodity environment in the quarter, with steel up over 10% and aluminium and platinum up nearly 40%, which the company only partially offset through calibrated pricing — leaving less room to protect the price-sensitive entry segment.
