GST revamp: Motorcycle may become ₹5,000-15,000 cheaper, says Bajaj Auto

Rakesh Sharma said there are multiple other drivers of conversion to electric vehicles, including operating economics, convenience, freedom from the monthly fuel budget and improved technology

Bajaj Auto expects motorcycle prices to fall between ₹5,000 and ₹15,000, depending on the model, after the GST Council decided to cut goods and services tax on bikes with engines below 3,500cc to 18 per cent from 28 per cent. The company expects the industry to return to sales levels last seen in 2018–19. 

Speaking to Business Standard, Bajaj Auto Executive Director Rakesh Sharma confirmed the reduction. “The move will certainly boost the industry not only in terms of volumes, but will promote uptrading —-so industry should benefit from growth as well as the quality of growth. With this, we can hope to equal the previous high for the industry, which was achieved in FY19 and from which we are still 10 per cent down in terms of year-to-date sales.” 

 Asked whether lower prices for internal combustion engine two-wheelers would slow the shift to electric vehicles, Sharma said: “Acquisition cost and in this case the price gap between electric and ICE also plays a role but decision making is now beyond this aspect. So we expect growth may slow down but it will still outpace growth of ICE scooters.” He said there are multiple other drivers of conversion to electric vehicles, including operating economics, convenience, freedom from the monthly fuel budget and improved technology. 

On three-wheelers, where duty has also been reduced to 18 per cent, Sharma said: “The need of last mile mobility is exploding and with the reduction in acquisition costs the paybacks will improve encouraging new entrants.”