GST rate cut-induced demand to stay unless inflation erodes purchasing power: Bajaj Auto ED

Demand boost in the two-wheeler segment generated by GST rate cut euphoria will last as long as inflation does not erode purchasing power of customers amid a looming threat due to rupee depreciation, Bajaj Auto Executive Director Rakesh Sharma said on Friday.

Demand boost in the two-wheeler segment generated by GST rate cut euphoria will last as long as inflation does not erode purchasing power of customers amid a looming threat due to rupee depreciation, Bajaj Auto Executive Director Rakesh Sharma said on Friday. The company, which saw record quarterly overall volumes in the third quarter, saw significant improvement in December 2025 and January this year, Sharma told reporters in an earnings call. ''It will last as long as inflation does not erode the purchasing power,'' he said when asked how long the GST rate cut euphoria-driven demand can last. He further said, ''If inflation is low, if there are no regulation led changes which cause the cost and prices to go up, then the customer is going to more and more experience better money in his or her pocket. And that is good for the industry, because it's a mass industry.'' Explaining why inflation remaining low is crucial, Sharma said, ''The average income of my customer (two-wheeler buyer) is Rs 40,000 per month. So every Rs 1,000 or Rs 2,000 makes a big difference, and that is what is very helpful in this GST rate cut.'' On the other hand, he said if there is fuel and rental inflation, people have to pay more and more, especially if there is a spike in rental inflation. ''If they start to erode the gains from the GST cut, then the growth rates choke, so we have to see how it plays out,'' Sharma noted. He pointed out that rupee ''devaluation is a big threat'' to the impact of GST rate cut lasting longer as ''there are so much (of) import dependencies there, whether in oil or otherwise''. In the third quarter, Bajaj Auto's total sales (including commercial vehicles) were at a record 13,41,252 units as against 12,24,472 units in the corresponding period last fiscal, up 10 per cent. The company's domestic two-wheeler sales were at 6,01,208 units as against 5,87,855 units in the year-ago period, up 2 per cent. Sharma said after the rationalisation of the GST, there was a very significant impact on demand, not only immediately after the festive season. The motorcycle industry moved from a negative zone into a double-digit positive growth, he said, adding, ''it is also the quality of growth with the upper segments outperforming the lower segments, and which plays very well for us''. Bajaj Auto's portfolio pivots on the proposition of trying to persuade customers to upgrade through higher displacements and more differentiated products through features, he noted.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)