Whalesbook
Bajaj Auto Faces Mounting Pressure in Domestic Motorcycle Market
Bajaj Auto's stronghold in the domestic motorcycle market is facing sustained pressure, with key rivals Hero MotoCorp Ltd. and TVS Motor Company Ltd. steadily gaining ground. The company has witnessed a considerable erosion of its market share across its core segments in recent years, a trend highlighted by recent industry data.
The Shifting Market Share Landscape
According to a Motilal Oswal report, Bajaj Auto's overall motorcycle market share has declined from 18.5% in the fiscal year 2020 (FY20) to 16.6% in FY25. This downward trend has continued, with the share standing at approximately 16% on a year-to-date basis for FY26. This overall decline masks more significant losses in crucial volume and profit-driving segments.
The most pronounced erosion has occurred in the 125cc and 150-250cc categories, historically the backbone of Bajaj Auto's domestic sales. These segments are vital due to their appeal to a broad customer base seeking a balance of performance, style, and affordability.
Competitors Capitalize on Bajaj's Weakness
In stark contrast, TVS Motor Company has been on a consistent upward trajectory. Its share of the motorcycle market has risen from around 15.5% in FY20 to nearly 19% in FY25, demonstrating successful strategies across commuter and mid-capacity motorcycles. Hero MotoCorp, despite facing some moderation, continues to hold the dominant position, with its market share easing from approximately 36% in FY20 to about 32.5% in FY25.
The 125cc segment, identified as the fastest-growing category, has seen aggressive competition. Bajaj Auto's share in this segment, which peaked at 27% in FY24, fell to 24.3% in FY25 and further to 23.3% year-to-date in FY26. Conversely, TVS Motor has dramatically expanded its leadership, increasing its share from 40.9% in FY24 to about 48.3% in FY26 so far. Hero MotoCorp's share in this segment has seen fluctuations but generally stayed lower than TVS Motor's.
Strategic Challenges and Future Outlook
Bajaj Auto's traditional stronghold, the 150-250cc segment, led by its popular Pulsar range, has also experienced a loss of momentum. The company's market share in this category dropped from 34.6% in FY24 to approximately 30.9% year-to-date FY26. During the same period, TVS Motor's share climbed significantly, narrowing the gap with Bajaj.
Bajaj Auto management has indicated plans for multiple model interventions, including refreshes to the Pulsar range and new launches in higher displacement categories like KTM and Triumph-linked models. However, a key new product for the crucial 125cc commuter segment is not expected until FY27.
Analysts caution that this delayed launch in the 125cc segment could make a meaningful near-term recovery in Bajaj Auto's domestic motorcycle market share challenging, as competitive pressures from Hero MotoCorp and TVS Motor are expected to intensify.
Impact
The sustained loss of market share could impact Bajaj Auto's revenue growth, profitability, and overall market valuation. Investors will closely monitor the company's product launch pipeline and competitive response strategies. The intensifying competition could also lead to price pressures and higher marketing spends, affecting margins across the sector.
Impact rating: 7/10
Difficult Terms Explained
- Market Share: The percentage of total sales in an industry generated by a particular company.
- FY (Fiscal Year): A 12-month period used for accounting purposes, often running from April 1 to March 31 in India.
- cc (Cubic Centimeters): A measure of engine displacement, indicating the engine's size and potential power.
- Portfolio: The range of products or services offered by a company.
- Variants: Different versions of a single product model, often with variations in features, engine size, or trim.
- Displacement: The volume swept by all the pistons inside the cylinders of an engine; higher displacement generally means a more powerful engine.