Bajaj Auto is exploring locations across India for its sixth manufacturing plant as rising demand for premium motorcycles and electric vehicles puts pressure on existing production capacity. The Pune-based automaker is holding discussions with several state governments to identify a suitable location for the proposed facility.
The expansion comes as demand for motorcycles under its Pulsar, KTM and Triumph brands, along with Chetak electric scooters, continues to grow in domestic and international markets. However, the company faces a contrasting trend in the entry-level motorcycle segment, where sales have declined amid intense competition and its strategy of prioritising profitability over volumes.
Premium Motorcycles and EVs Drive Demand
Bajaj Auto has reported strong growth in higher-capacity motorcycle categories. In the 150cc–200cc segment, the company recorded 33% year-on-year volume growth during the six months ended September 2026. Its volumes in the 200cc–250cc segment increased 82% over the same period.
The company’s premium motorcycle business, which includes KTM and Triumph, also recorded strong growth. Demand for these models, combined with increasing sales of Chetak electric scooters, has created capacity constraints across its manufacturing operations.
Bajaj Auto expects demand for premium motorcycles and electric two-wheelers to remain strong over the next few years, supported by domestic demand and export opportunities. The proposed sixth plant is intended to address these constraints and provide additional manufacturing capacity.
Chetak Production to Reach 80,000 Units a Month
Bajaj Auto is increasing production capacity for its Chetak electric scooter to meet rising demand. The company plans to raise monthly production to approximately 80,000 units by the January–March 2027 quarter, compared with around 64,000 units currently.
Production had previously been constrained by supply-chain disruptions, limiting output to approximately 40,000 units a month despite higher available capacity. The company has since restored production and is working to remove remaining bottlenecks.
Chetak recorded its strongest-ever quarterly performance in the July–September 2026 quarter, with volumes more than doubling year-on-year and revenue crossing ₹2,000 crore. Bajaj Auto is also planning to expand the Chetak product range and strengthen its retail network to support further growth.
Entry-Level Motorcycle Sales Under Pressure
While premium motorcycles and electric scooters are driving growth, Bajaj Auto is losing ground in the entry-level segment. Its motorcycle sales in the below-150cc category declined 24% year-on-year during April–September 2026, even as the broader segment grew 6%.
Sales in the 100cc economy motorcycle category fell 26%. The company has chosen to protect profit margins rather than cut prices aggressively to defend market share, putting it under pressure from competitors such as Hero MotoCorp and Honda Motorcycle and Scooter India.
Bajaj Auto is attempting to revive sales through product upgrades in its 125cc and 150cc motorcycle portfolios. The company reported that newer models accounted for a larger share of sales in September and during the initial days of the festive season, indicating early signs of improvement. However, a sustained recovery remains to be seen.
Manufacturing Expansion to Support Long-Term Growth
The proposed sixth plant forms part of Bajaj Auto’s broader effort to increase manufacturing capacity across its businesses. Strong export demand, rising electric vehicle adoption and growth in premium motorcycles and three-wheelers have all contributed to the need for additional production facilities.
The company is also expanding capacity in its electric three-wheeler business, where demand has outpaced available supply. Its international business remains an important growth driver, with two-wheeler exports from India increasing 47% year-on-year during the first half of FY27, according to industry data cited by the company.
Bajaj Auto has not finalised the location, investment amount or production capacity of the proposed sixth plant. The ongoing discussions with state governments will help determine the project’s next steps.
The expansion highlights the growing divide within India’s two-wheeler market, where premium motorcycles and electric vehicles are gaining momentum while entry-level models face pricing pressures. Bajaj Auto’s ability to expand production, improve product offerings and revive commuter motorcycle sales will be important to sustaining growth.
