Buyers switch to high mileage bikes as petrol prices, third-party insurance premiums head north

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26 Aug, 2025 12:21

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Continued rise in the price of petrol, higher insurance costs and lower product appeal have dented demand for commuter bikes as buyers switched to more frugal budget bikes.

Bikes with 125cc engines, which promise better power than 100cc budget bikes, are lower on mileage and have seen a steady fall in demand, as per data shared by the Society of Indian Automobile Manufacturers (SIAM).

Sales of 125cc segment bikes fell to 1.70 million units, a year-on-year slide of 8 percent during April-January period this fiscal. In comparison, sales of bikes with engines less than 110cc grew 17 percent during this fiscal to 7.14 million.

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When fuel prices were under check during 2017-18, sales of 125cc bikes rose 16 percent to 2.19 million units, outpacing the growth of 100cc bikes, whose sales rose by 15 percent last fiscal.

Cost of a litre of petrol hit an all-time high of Rs 91 (in Mumbai) in September last year, following a steady dip in the value of the dollar-rupee and rise in global oil prices.

Hence, buyers preferred to switch to cheaper and more fuel efficient 100cc budget bikes. On an average, budget bikes give a mileage of 75-80 km per litre as against 60-65 km for 125cc bikes.

Sanjay Bhan, Head of Sales and Aftersales, Hero MotoCorp said, “There is virtually no growth in the 125cc segment. We are witnessing a lot of downgrade because of increased cost. There is a certain type of consumer who is settling for a smaller bike, probably moving towards Splendor or 100cc instead of 125cc. This is new trend that we have seeing here due to cost implications and owing to higher third-party insurance costs that happened sometime in September.”

Insurance factorInsurance costs jumped nearly five times after September last year, when the Supreme Court made in mandatory to pay third-party premiums for five years instead of one-year as was the case earlier.

Another reason for the consumer shift to 100cc is because of higher value addition by companies. Bajaj Auto, for instance, is providing features, including LED lamps, tubeless tires, and Nitrox suspension on the 110cc bike, which are usually seen on 125cc bikes.

The Pune-based company saw its sales zoom 57 percent in the 100-110cc bike segment, with models such as CT100 and Platina, during the April-January period, as per industry body SIAM. The maker of Pulsar and Avenger bikes has promised to launch more models in this segment to keep buyer excitement high.

Rakesh Sharma, Bajaj Auto's Chief Commercial Officer & Additional Whole Time Director, said, “Our upgrades will be launched between February and April, which will be similar in nature, not big platforms, not new platforms, but value-added products like with the Platina 110. These kinds of offerings to the customer -- LED lamps, tubeless tires and Nitrox suspension -- are not known to be offered to a 100cc entry-level customer. Now, what we are attempting is to take to build a franchise for Platina, which is based on things that are usually offered in a 125cc customer and trying to upgrade the customer into that."