Bajaj to Tweak KTM, Triumph Range to Meet GST Benefits

Bajaj to Tweak KTM, Triumph Range to Meet GST Benefits

Issue: Bajaj Auto faces a tax disadvantage on its mid-to-high capacity motorcycle range (KTM and Triumph) because the engine displacement of popular models is slightly above the 350cc threshold, causing them to attract the highest GST slab instead of the concessional rate.

Facts:

• The recent GST rate cut, effective September 22, 2025, favors two-wheelers with engines up to 350cc (attracting 18% GST). All other models fall under the highest tax bracket of 40% GST.
• Key Bajaj-produced models, including KTM’s 390 Duke/RC/Adventure and the entire Triumph range (Speed, Scrambler), are powered by a 400cc engine, placing them on the wrong side of the GST divide.
• The mid-capacity market leader, Royal Enfield, derives over 85% of its sales from models like the Classic series, which have a 350cc engine and thus benefit from the 18% GST rate.
• Triumph and KTM reported an all-time high growth of 30% in the September quarter, driven by the overall customer desire for aspirational upgrades triggered by the GST cuts.

Decision:

Bajaj Auto is actively working with its partners, KTM and Triumph, to tweak and reshape its motorcycle portfolio by introducing products with smaller engine displacements to qualify for the lower 18% GST rate.

Key TakeDowns:

• Engine Downsizing: Bajaj is expected to reduce the engine displacement (likely by 25cc to 50cc) on models like the KTM 390 range and its own Pulsar/Dominar 400 models to bring them below the 350cc threshold.
• Performance Challenge: This strategy presents a technical challenge, as the performance (peak power delivery) of these models might be affected, requiring Bajaj to manage customer expectations for performance-focused brands like KTM.
• Market Shift: The move confirms the powerful influence of the GST rate structure on the automotive industry’s product portfolio planning, forcing manufacturers to align their engine capacity to tax slabs to gain market competitiveness. * Target Segments: Bajaj is targeting the lucrative 150cc super-premium segment (with the Duke 160 launch) and challenging leadership in the Adventure segment (with KTM Adventure and Triumph Scrambler).