Bajaj Auto is pursuing an expansion strategy encompassing manufacturing capacity, new product launches, electric vehicles, exports and premium motorcycles, while continuing to support the turnaround of Austrian motorcycle manufacturer KTM.

The company outlined its plans after reporting financial results for the April-June quarter, with management citing demand across exports, electric vehicles, premium motorcycles and selected internal combustion engine (ICE) models.

Manufacturing capacity expansion

Bajaj Auto plans to increase its annual manufacturing capacity by more than 25% over the coming quarters. Joint Managing Director Rakesh Sharma said capacity constraints had limited the company's ability to fully meet demand across several business segments.

"Supply chain disruptions will hopefully ease off, but we have faced capacity constraints and we are undertaking a major capacity expansion. We have our capacity, all the businesses put together, around 7 million units and progressively over the next few quarters, we will increase it to 9 million or over 9 million, so almost a 25% expansion," Sharma said.

According to Sharma, the expansion is being driven by export demand, rising electric vehicle demand, capacity shortages in certain ICE models and increasing demand for premium motorcycles.

"In recognition of the strong export demand, the galloping EV demand and also certain models in cellular ICE where we have faced constraints and the high-end bikes. All of these challenged capacity in the last quarter and the expansion is being undertaken," he said.

The company has yet to finalise the location of the additional capacity and is evaluating multiple options. Sharma said the expansion is likely to include both brownfield additions at existing facilities and a greenfield manufacturing plant, although he declined to disclose the planned capital expenditure. The additional capacity will primarily support electric two-wheelers, electric three-wheelers, premium motorcycles and selected ICE three-wheeler models. Sharma also noted that suppliers would need to expand their own production capabilities in line with Bajaj Auto's growth plans.

Supply chain disruptions affected production

During the April-June quarter, Bajaj Auto's production was affected by supply chain disruptions involving logistics, manpower availability and gas supply. According to Sharma, the company lost approximately 10-15% of its potential production during the quarter as a result of these challenges. When asked about factory utilisation, Sharma said utilisation levels varied significantly across products and therefore could not be represented by a single overall figure.

Motorcycle product launches planned ahead of the festive season

Alongside its capacity expansion plans, Bajaj Auto is preparing a refresh of its motorcycle portfolio. The company plans to introduce 10 new motorcycle models over the next six weeks, including two all-new Pulsar motorcycles in the 125cc and 150cc segments.

"Going forward, we will, in the next six weeks, completely make over the portfolio by adding another 10 models, two of which would be absolutely new motorcycles, they will be absolutely new motorcycles in the 125 and the 150cc segments, though under the Pulsar brand," Sharma said.

The launches form part of a broader portfolio renewal programme initiated after Bajaj identified slowing momentum across several existing products.

"We had launched a portfolio makeover post-festive last year, beginning November, because a lot of the portfolio which had been, which had sort of held us in good stead since post-COVID and then you know driven our market share expansions, had started to exhibit end-of-cycle fatigue. We prioritised the 150cc's first, and we had upgraded many of our models in the November-December period; I think eight odd models have been upgraded," Sharma said.

The remaining launches will begin in August, with the full range expected to be refreshed before the festive season.

"So you know by the time we approach the festive in October, you should have a completely new and upgraded portfolio, part of which is already in play, part of which is going to start unfolding from August onwards. We will continue this movement of expansion of market share in a whole strategic area of the upper half of the industry," he added.

Focus on the 125-160cc motorcycle segment

Bajaj Auto is planning additional upgrades across its 125-160cc motorcycle portfolio after recording growth in its sports motorcycle segment during the April-June quarter. The company stated that interventions across the Pulsar range contributed to market share gains and growth in the sports motorcycle category.

"Pulsar, Avenger and Dominar all grew double digit YoY; the sports segment was at ~50% growth as product interventions across the Pulsar range drove market share gains; upcoming upgrades across 125-160cc are expected to further strengthen competitive positioning," Bajaj Auto said in its quarterly earnings statement.

The company's existing 125-160cc portfolio includes motorcycles under the Pulsar and Freedom brands. Bajaj Auto has not specified whether the planned upgrades will cover the entire portfolio or selected models, nor has it announced a detailed rollout timeline. The company previously stated in its annual report that it intends to sharpen its focus on the domestic 125cc-plus motorcycle segment during the current financial year while accelerating growth in the Chetak electric scooter business and the KTM and Triumph premium motorcycle brands. It also plans to continue expanding exports despite geopolitical uncertainties, commodity price inflation and supply chain disruptions.

Expansion planned for the Chetak electric scooter range

Bajaj Auto intends to broaden its electric vehicle portfolio through additional products under the Chetak brand. When asked about upcoming launches, Sharma said: "We have got a couple of launches coming up, which will open up new segments, very interesting launches in the next six months."

He further added that the company would continue expanding the Chetak portfolio rather than introducing a separate electric scooter brand. Sharma also confirmed that Bajaj Auto is developing electric motorcycles for the emerging segment. The company further stated that it plans to expand manufacturing capacity for electric vehicles and premium motorcycles, diversify material sourcing and continue efforts to improve KTM's performance.

Quarterly performance

The expansion plans follow Bajaj Auto's financial results for the April-June quarter. Revenue from operations increased 37% year-on-year to Rs. 172.4 billion (US$ 1.8 billion), supported by higher sales volumes and improved realisations. Profit after tax rose 42% to Rs. 29.8 billion, while EBITDA (earnings before interest, taxes, depreciation and amortization) increased 45% to Rs. 35.9 billion. The company's EBITDA margin improved to 20.9%, compared with 19.7% in the corresponding period last year. Domestic two-wheeler sales grew 11%, while exports increased 52%.

KTM turnaround

Bajaj Auto also provided an update on KTM's restructuring and recovery following the Austrian company's liquidity crisis. Bajaj's relationship with KTM began in 2007 through a strategic alliance to jointly develop and market premium motorcycles globally.

In November 2025, after KTM entered restructuring proceedings due to liquidity challenges, Bajaj increased its stake in holding company BAIH AG from 49.9% to 100%, making KTM a step-down subsidiary. To support KTM's restructuring, Bajaj provided an EUR 800 million (US$ 912.6 million) support package. Earlier this year, KTM completed a refinancing exercise through a EUR 550 million loan from an international banking consortium and repaid the earlier EUR 450 million loan extended by Bajaj Auto International Holdings BV. The refinancing reduced KTM's dependence on intra-group funding.

Sharma said Bajaj's immediate priority is to ensure that KTM operates independently under its new management team while receiving the support required to complete its turnaround.

"First of all, our approach is that KTM has to be run independently by the new management. We have facilitated, we have injected liquidity, we have facilitated the change of installation of new leadership over there. And we are facilitating improvement in cost structures through expansion of sourcing from more competitive places, most notably in India. After that, it has to be run," Sharma said.

He further added that Bajaj remains open to considering a strategic partner in the future should one emerge with a vision aligned with KTM's long-term strategy.

"Now, in the future, if there is a strategic partner whose vision and strategies align with KTM, that is a question to be considered. That opportunity is always open. But it is not as if there is a hunt on for somebody to come in and participate in KTM," he said.

The comments indicate that, while Bajaj is not actively seeking a financial or strategic investor for KTM, it remains open to evaluating partnership opportunities. According to Sharma, KTM's recovery is progressing in line with expectations, and the company returned to EBITDA breakeven during the April-June quarter after several quarters of losses. He said the improvement followed Bajaj's liquidity support and management changes, adding that KTM is expected to continue improving both revenue and profitability over the coming quarters.