Business Daily from THE HINDU group of publications
Friday, Jan 05, 2007
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Business Daily from THE HINDU group of publications Friday, Jan 05, 2007 ePaper |
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Markets
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Interview
Even as Bajaj Auto has come out with good December sales numbers market reports say perhaps the company will go through a demerger sooner rather than later. But the Managing Director of Bajaj Auto, Mr Rahul Bajaj, confirms that nothing has been decided on the demerger as the issue has not been referred to the board yet. But he assures that the demeger will happen keeping the shareholders' best interest in mind. Discussing the company's sales numbers and business, Mr Bajaj says motorcycles will maintain robust growth. The company is launching its first scooter model Kristal this month and the Blade will be launched in eight months. The company will also increase its motorcycle capacity to 3 lakh units per month from April onwards, he says. Excerpts from CNBC-TV18's exclusive interview with Mr Bajaj: Your company has registered 26 per cent growth in sales for December 2006 and for the entire year it may be over 30 per cent. Do you think this momentum can be maintained in 2007? Obviously no one has a crystal ball but we are all optimistic with the GDP growth rate of three years of over 8 per cent, April-September of more than 9 per cent, investment plans up, doubling of FDI to $4 billion in six months, everything appears good. Things are moving ahead but there are concerns. Hero Honda motorcycle growth in December was flat and TVS was minus 2-3 per cent. The rising lending rates could affect demand to some extent. Very few buy paying 100 per cent cash. Trade deficit is certainly an area of caution. During April-September 2006, it was $18 billion. So it is not a very good sign. I think oil prices are likely to remain in the range of $60-70 per barrel. I am all for liberalisation, globalisation but we must see India's interest and Indian corporate interest, that is what America, Europe and Japan are doing and we are not looking after our corporate interest. On your plans to demerge the financial business... I talked about it four years ago. It is important but now it is on the back-shelf for many reasons and nothing has been decided. It has not been referred to the board and till we take a view and it is put up by the management to the board, I do not think it is appropriate or proper to talk about it. It is sensitive information. What is your call on market share and margins for two-wheeler players for 2007? The two-wheeler sector in India is now made up of over 85 per cent motorcycles, with the remaining being mopeds and scooters. We are launching a scooter Kristal this month. Maybe after six-eight months, we will bring out a bigger scooter called the Blade. These are both gearless scooters. So hopefully the scooter segment will also expand. I think the growth will remain because even with the low cost cars coming in, I do not think a car for Rs 1 lakh is possible - for the customer it will become a Rs 1,60,000-1,80,000 car. The low cost cars would may be take away some of the demands from two-wheelers today but today motorcycles are from Rs 30,000-Rs 80,000 per vehicle and the maintenance expenditure, the fuel consumption is much lower. So I do not think there will be much impact.
More Stories on : Interview | Two/Three Wheelers | Bajaj Auto Ltd
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