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KTM Adjusts Prices, Plans New Sub-350cc Models
Bajaj Auto's premium motorcycle brand, KTM, has raised prices on its 390 Duke and 390 Adventure X models. Ex-showroom prices are up by as much as Rs 40,000, as Bajaj Auto stops absorbing the higher Goods and Services Tax (GST) applied to motorcycles over 350cc. This move not only reflects the increased tax but also supports the upcoming launch of new KTM models with engines under 350cc, which will benefit from lower tax rates.
Why Prices Are Rising: GST and Market Strategy
The main reason for the price increase is that GST on motorcycles over 350cc now stands at 40%. Bajaj Auto had been absorbing this higher tax burden since September 2025 to keep prices competitive. Now, the 390 Duke costs Rs 3.39 lakh in Delhi, an increase of Rs 40,000, and the 390 Adventure X is priced at Rs 3.43 lakh, up by Rs 17,000. This larger price difference, now about Rs 1.22 lakh between the 390 Duke and the 250 Duke, highlights a deliberate move to segment the market. On-road prices for the 390 Adventure X are now nearing Rs 4 lakh in many cities.
Market Trends and Competition
Bajaj Auto is developing new KTM models with engines under 350cc. These bikes will face an 18% GST rate, compared to the 40% for larger bikes. Industry watchers expect these sub-350cc versions to be sold alongside the current 390 models, offering buyers different price and performance choices. This strategy mirrors moves by other companies like Triumph, which partnered with Bajaj to launch more affordable models such as the Speed 400 at Rs 2.31 lakh.
India's premium motorcycle market is growing, valued at $2.4 billion in 2025 and expected to reach $5.8 billion by 2034, growing at a 9.94% annual rate. While Royal Enfield's Himalayan 450 remains a competitor, priced between Rs 3.05 lakh and Rs 3.37 lakh, KTM's new strategy aims for a wider entry point into the premium segment. However, Bajaj Auto's share in the 125cc+ segment has declined, showing shifting consumer tastes and tougher competition.
Analysts generally rate Bajaj Auto as 'Moderate Buy' or 'Neutral', with 12-month price targets around ₹10,000-₹11,500 INR, seeing potential upside but some caution on current stock prices. The company's P/E ratio is between 24.8x and 30.7x, with a market value around ₹2.47-2.55 trillion INR. Historically, Bajaj Auto's stock has reacted positively to favorable GST changes.
Potential Challenges Ahead
While introducing sub-350cc models and adjusting prices seems logical, potential challenges exist. Lower performance in the new 350cc models, even with retained features, might test brand loyalty for riders who expect KTM's 'Ready to Race' feel. Having both 390 and 350cc models together could lead to bikes competing with each other, making sales strategies complex. Bajaj Auto's falling share in the 125cc+ segment is a persistent issue, as rivals like Royal Enfield continue to lead in premium bikes. Analysts also note valuation concerns, suggesting the stock might be priced higher than usual, risking a drop if growth forecasts aren't met. How management balances these two strategies and handles more competition will be key.
KTM's Future Plans
KTM and Bajaj Auto are aiming to capture a wider part of the premium motorcycle market. By offering different bikes based on engine size and tax benefits, they aim to be more accessible and appeal to more customers. The new 350cc bikes should offer a clearer entry point for riders joining the KTM brand, potentially increasing total sales. The 390 series will remain for buyers focused on performance and willing to pay more, keeping the brand aspirational. This strategy's success depends on customers embracing it and the continued growth of India's premium motorcycle market.