Increased GST tax on larger motorcycles, affecting Royal Enfield and Bajaj companies

In a move that may impact the motorcycle market, the recent GST increase has brought about changes in pricing for certain models. The tax reform primarily affects motorcycle manufacturers and dealers who produce or sell larger engine motorcycles, leaving entry-level models under 350 cc relatively unaffected.

KTM, owned by Bajaj, exclusively sells performance-oriented motorcycles over 350 cc, including the RC, Duke, and Adventure series. With the GST increase, the prices of these motorcycles will climb under the new regime, potentially causing a ripple effect in the market. On the other hand, Bajaj's entry-level motorcycles such as the Avenger 400, Pulsar N125, Freedom, Dominar 400 RS200, and Pulsar 125 Neon, remain unaffected as they are below 350 cc and are not affected by the GST increase.

Royal Enfield, another prominent player in the motorcycle industry, faces a significant setback due to the GST increase, particularly for its larger bikes. The Himalayan (450 cc), Guerrilla (450 cc), Scram (440 cc), and the 650 cc (Interceptor, Continental GT, Super Meteor, Shotgun, and Interceptor Bear) will become significantly more expensive. However, Royal Enfield's core 349 cc models like the Hunter, Classic, Meteor, Goan Classic, and Bullet are in the lower 18% GST slab, making them more affordable for consumers.

The tax hike may blunt the value proposition of motorcycles under Bajaj Auto and KTM, which were positioned as accessible entry points into the mid-capacity segment. This could potentially shift consumer preferences towards more affordable options, such as Royal Enfield's 349 cc models or other entry-level motorcycles.

The story is not the same for Triumph, as their motorcycles co-developed with Bajaj fall into the higher tax bracket, ensuring that entry-level models under 350 cc from Triumph will not be affected by the GST increase.

As the festive season approaches, enthusiasts eyeing bigger KTM or Bajaj motorcycles may find themselves needing higher budgets due to the GST increase. On the other hand, this could be an opportune time for those looking to invest in entry-level motorcycles, as they will see a GST reduction from 28% to 18%.

The GST increase, while impacting the prices of certain motorcycles, is expected to reshape the market dynamics in the coming months. As always, consumers are advised to consider their options carefully before making a purchase.

Increased GST tax on larger motorcycles, affecting Royal Enfield and Bajaj companies