India’s entry-level motorcycle segment is staging a sharp comeback after years of decline, reshaping competitive equations in the two-wheeler market. The rebound, triggered by GST (goods and services tax) rationalisation, has propelled Hero MotoCorp to its strongest position in nearly a decade, while rivals Bajaj Auto and TVS Motor Company continue to lean toward higher-capacity motorcycles.
In January 2026, motorcycles below 110cc accounted for 44 percent of the domestic motorcycle market. Of this, Hero MotoCorp controlled a dominant 81 percent share, underlining its grip on the mass commuter category.
Between November and January:
- The entry-level segment grew 25 percent, averaging 4.78 lakh units per month, according to SIAM (Society of Indian Automobile Manufacturers) data.
- The overall domestic motorcycle industry expanded nearly 28 percent, with monthly volumes touching 1.06 million units.
- The numbers suggest that the revival at the bottom of the pyramid has been instrumental in lifting overall industry growth.
Hero outpaces rivals
Hero MotoCorp posted a 30 percent volume growth during the November–January period — outperforming both the segment and the broader market.
In contrast:
- Bajaj Auto’s volumes declined 14 percent
- TVS Motor grew by 12 percent, well below the entry segment’s average growth
Hero’s market share in the entry segment surged to 91 percent, the highest since FY2018 — marking an eight-year peak.
A key driver has been the surge in first-time buyers. Hero said the share of first-time customers has risen from around 75 percent to 80 percent, attributing the shift to GST rationalisation that effectively rolled back two-wheeler prices to levels seen three years ago.
“We have seen a lot of first-time buyers coming into the category. This was one of the reasons why we saw such a phenomenal response in the festive season across the industry, and we expect that to continue as we move forward into Q4FY26 and Q1FY27 as well,” said Chief Business Officer – India Business Unit, Hero MotoCorp.
He added that rural demand exceeded expectations. With the wedding season beginning in February and early festive triggers from March, the company expects rural momentum to remain strong.
Rivals see premium bias
At Bajaj Auto, the management struck a more cautious tone on the entry-level segment’s revival.
Responding to queries after the December 2025 quarter results, Executive Director said the segment has benefited, but less than higher-priced motorcycles.
“The higher-priced products have benefitted the most. Those whose wallets were already strong have made a faster transition from being cautious to being optimistic,” he said.
He noted that the August 15 GST announcement made it difficult to isolate October’s impact, as pent-up demand merged with festive buying and spilled into November. However, in December and January, bigger bikes have been performing better than entry-level models.
He highlighted affordability pressures: “Our customers earn Rs 40,000 a month and a Rs 2,000 increase in expenses is a huge negative.”
At TVS Motor Company, CEO told analysts after Q3 results that executive motorcycles and scooters are growing strongly, while entry-level growth remains moderate. For the company, the urban markets grew 21 percent during the quarter, compared to 19 percent in rural markets.
A structural reset?
The GST-led price correction appears to have temporarily restored affordability in the entry-level category, particularly for rural and first-time buyers. For Hero, with its deep distribution and commuter-heavy portfolio, the reset has translated into near-total dominance.
Whether this marks a sustained structural shift back towards entry-level motorcycles — or a short-term demand spike — will depend on inflation trends, regulatory costs and rural income stability.
For now, however, GST has re-tuned the market — and Hero MotoCorp is riding the rebound harder than anyone else.
