Bajaj Auto has no plans to pull the plug on CNG motorcycles despite sluggish sales

Bajaj Auto Ltd remains confident about its CNG-powered motorcycles despite tepid volumes. Sales of the Bajaj Freedom 125, the only gas-run two-wheeler in the country, declined 65% year-on-year to 3,874 units in October, according to the government's VAHAN registration portal.

"I don't think we are pulling the plug on that (Freedom 125). Some of these new innovative disruptions take time to land... We are very much going to stay the course on it," Dinesh Thapar, chief financial officer of Bajaj Auto, said during a media conference call after the company announced its second-quarter earnings.

While Bajaj Auto is optimistic about its CNG motorbike, the Pune-based automaker is also working on electric motorcycles. “There is work underway on the electrification of the Pulsar and the Boxer,” said Thapar.
Electrification of motorcycles is critical to realizing the government’s ambition of increasing electric vehicle penetration to 30% by 2030, as motorbikes account for two-thirds of total two-wheeler sales.

However, a lack of localisation in the EV supply chain, particularly rare earth magnets, disrupted EV production in the second quarter. Bajaj Auto had to reduce its EV production in the second quarter due to rare earth magnet curbs imposed by China. To address the shortage, the automaker adopted Less Rare-Earth (LRE) permanent magnet grades instead of Heavy Rare-Earth grades.

"We have re-homologated the entire traction motor range with LRE. There is work underway on de-risking ourselves from rare earths entirely and looking at motors that are rare-earth-free," said Thapar.

Despite production cuts amid the rare earth crisis, Bajaj Auto overtook TVS Motor Company to become India's top-selling electric scooter maker in October. The automaker is now planning to introduce a new platform under the Chetak brand.

Regarding taking control of Austrian motorcycle brand KTM, Rakesh Sharma, executive director of Bajaj Auto, said the company will look at all options to reduce costs. “Moving the manufacturing of some KTM motorbikes to India will be evaluated,” he added. Bajaj Auto is expected to gain majority control over KTM by mid-November.