Bajaj Auto’s limited presence in scooters, a tilt towards premium motorcycles and intermittent supply disruptions weighed on its performance in FY26, leaving it behind peers in a year when the two-wheeler industry posted a broad-based recovery.
Domestic two-wheeler sales rose 11% year-on-year to 21.7 million units in FY26, aided by GST reductions and improving rural demand, reversing expectations of subdued, single-digit growth. Bajaj Auto, however, reported a muted 2% increase in domestic volumes at 2.35 million units, making it the weakest performer among large listed manufacturers.
Shrinking Market Share
The gap was most visible in scooters, the fastest-growing segment during the year. Scooter volumes expanded 18.5% to 8.12 million units, compared with a 6.6% rise in motorcycles to 13.06 million units. Bajaj’s absence from the mainstream scooter market limited its ability to capture this upswing, unlike rivals that have expanded offerings in the category.
As a result, Bajaj Auto’s domestic market share declined to about 10.8% in FY26 from 11.8% a year earlier. Competitors reported stronger gains. TVS Motor Company led with a 21% rise in domestic volumes, while Hero MotoCorp and Honda Motorcycle and Scooter India each grew 8%, supported by recovery in entry-level and commuter segments.
The company’s electric mobility push has yet to offset this gap. Bajaj Auto sold 289,393 electric scooters in FY26, trailing TVS Motor’s 341,740 units. The divergence widened from the previous year when both companies had similar volumes, indicating faster scale-up by TVS in the segment.
Premiumization Paradox
Operational challenges also affected output. Bajaj was among manufacturers impacted by China’s export restrictions on rare-earth magnets, leading to supply constraints and temporary production disruptions during the year.
Its premiumisation strategy further moderated growth. The company’s focus on higher-end motorcycles, including the Pulsar range and partnerships such as KTM, faced uneven demand as discretionary spending in premium categories remained cautious despite the broader recovery.
At the same time, the entry-level motorcycle segment – central to the current upcycle – saw stronger traction for competitors, particularly Hero MotoCorp, widening the divergence in volume growth.
In overseas markets, Bajaj Auto posted an 18% rise in exports to 1.97 million units, but this remained slower than peers, mainly because of the high base as Bajaj continues to be the highest two-wheeler exporter. TVS Motor reported 31% export growth, Hero MotoCorp 39%, and Honda Motorcycle and Scooter India 23%, while overall industry exports increased 23% in FY26.