Whalesbook
India's Ministry of Road Transport and Highways (MoRTH) has firmly stated that the deadline of January 1, 2026, for implementing mandatory Anti-lock Braking Systems (ABS) on two-wheelers with engine capacities below 125cc will remain unchanged. This decision comes despite repeated pleas from the two-wheeler industry for an extension.
During a recent meeting, MoRTH officials emphasized that safety regulations cannot be compromised. They indicated that the additional cost of incorporating ABS is manageable and that manufacturers should factor this into their product pricing strategies.
Original Equipment Manufacturers (OEMs) had argued that installing ABS could increase vehicle prices by approximately Rs 5,000 to Rs 6,000. They expressed concerns that such a price hike might suppress demand, particularly in rural areas where entry-level motorcycles are predominantly sold. However, the ministry maintained that rider safety is non-negotiable and cannot be sacrificed for cost considerations. The ministry also pointed out that Goods and Services Tax (GST) rates on two-wheelers up to 350cc have already been reduced to 18% from 28%, which could help offset some cost pressures.
Industry players, including Hero MotoCorp and Honda Motorcycle and Scooter India (HMSI), cited international examples like Japan, where ABS is mandatory only for motorcycles above 125cc, with smaller models permitted to use Combined Braking Systems (CBS). They argue that CBS offers adequate safety for commuters using these bikes for short distances. The mandate is expected to disproportionately impact the mass segment, which accounts for nearly 85% of domestic motorcycle sales. Hero MotoCorp, which heavily relies on this segment, is anticipated to be the most affected, followed by TVS Motor Company and Bajaj Auto.
Impact:
This news will directly affect the manufacturing costs and pricing strategies of major Indian two-wheeler companies. Companies will need to invest in ABS technology for their entry-level models, potentially leading to higher retail prices for consumers and a possible impact on sales volume in the price-sensitive mass market segment. The sector will need to innovate to absorb these costs or pass them on effectively. Rating: 7/10.
Difficult Terms:
- Anti-lock Braking System (ABS): A safety system that prevents wheels from locking up during braking, helping the driver maintain control and reduce stopping distance.
- Ministry of Road Transport and Highways (MoRTH): The government ministry responsible for the development and administration of roads and transport in India.
- Original Equipment Manufacturers (OEMs): Companies that produce parts or systems used in another company's end product. In this context, it refers to the two-wheeler manufacturers themselves.
- Combined Braking System (CBS): A braking system where applying one brake lever (front or rear) also activates the other brake, distributing braking force to improve stability and reduce stopping distance compared to independent braking.
- Goods and Services Tax (GST): A consumption tax imposed on the sale of goods and services, levied at each stage of production and distribution chain.