Triumph and Bajaj’s strategic partnership has resulted in a new 400cc portfolio which consists of Speed 400, Speed T4, Scrambler 400X and Thruxton 400. These act as an entry portal into Triumph’s rich motorcycling legacy. With GST 2.0 reforms, these motorcycles are set to be more expensive with a higher 40% tax slab.
Bajaj recently issued a statement saying much of its portfolio will be realigned to sit below 350cc displacement mark. This is to steer clear of this higher tax slab. While the exact timeframe and displacement number is not revealed, a new 350cc portfolio might launch within a year and all of the current 400cc bikes may be ported over. Let’s take a closer look.
New Bajaj Triumph 350cc Bikes
Within Bajaj’s umbrella, we have Triumph and KTM partnerships and it is Triumph which will be the most affected with this higher 40% GST slab. That is because Bajaj and KTM have lower displacement motorcycles too, while Triumph does not. This might be a catalyst for Bajaj Triumph to devise a new 350cc portfolio and then replace 400cc with this new engine in India.
There is less clarity about exports of these Triumph single-cylinder motorcycles. Triumph might continue to export higher displacement 400cc portfolio to global markets while limiting 350cc portfolio only to India. Conversely speaking, both 400cc and 350cc motorcycles might be exported as well. There is less clarity if Bajaj and KTM will also spawn a sub 350cc version of Pulsar NS400Z or 390 lineup.
Bajaj Triumph 350cc engine is likely to be based on the same 399cc block that does duties in Speed 400 and the likes. The company might employ a shorter stroke to bring total displacement down to around 350cc or reduce the bore. Either way, this engine will undergo thorough rework. Bajaj Triumph duo is already known to change mechanical hardware to carve out different versions like we saw with Speed T4.
Higher GST slabs to blame
The entire nation is rejoicing over the new GST 2.0 reforms with lowered GST tax slabs which are set to take effect from September 22nd. Even multi crore luxury car buyers have been blessed with GST reductions of over Rs 30 lakh. Within the 2W realm, only middle-class 2W buyers aspiring to own a motorcycle or scooter with displacements above 350cc, have been hit with a higher tax slab of 40%.
Indian Government has reserved this higher 40% GST slab only for “Sin and Luxury” products. The higher tax slab of 40% should have logically applied on 2W with displacement way above 350cc. Rajiv Bajaj, MD and CEO of Bajaj Auto has raised concerns regarding 350cc+ motorcycles now falling under a higher 40% tax slab, saying this move will not majorly contribute to any increased GST collections as they hardly account for around 1% to 2% of total motorcycle sales.
The 350cc to 500cc segment motorcycles were already facing a sales crisis and this new 40% GST 2.0 slab is like salt on the wound. The new GST 2.0 reforms have received major criticism from other sectors too, where GST has been brought to 5% and 0%. Concern is that manufacturers are finding it difficult to offset Input Tax Credit (ITC). Will the Indian Government make any further changes to GST 2.0 reforms or push through with current rates? Only time will tell.
Source: Bike - rushlane.com
