Bajaj Auto expected export downturn, says Business Development president

Hiral Desai Deepanshu Bhandari | Updated on January 16, 2018

S RAVIKUMAR, President - Business Development, Bajaj Auto   -  PTI

S Ravikumar says it is on the lines of what the company had guided in the beginning of the year

Bajaj Auto has reported a 5 per cent decline in its total sales — 3,25,347 units in August as against 3,41,965 in the same month a year ago. Motorcycle sales during the month fell 4 per cent. The commercial vehicles sales saw a decline of 12 per cent. The domestic sales, however, have been up 25 per cent. Its exports in August saw a fall of 31 per cent. BTVI discusses the earnings and the company’s plans ahead with S Ravikumar, President - Business Development, Bajaj Auto. Excerpts:

Your domestic sales have been healthy, but the export market has been under pressure...

Yes. That is nothing new to us. What you see here is a good 27-per cent growth in the domestic motorcycles and around 28-per cent growth in three wheelers. And in exports, we are now comparing with last August, which was a very nice at 1,82,000 units. That was at its peak and the base effect is showing there. But lack of around 25,000 units per month in exports is what we had guided in the beginning for the current year and we are tagging along on the same rate.

You mentioned that the export downturn is pretty much what you expected. When do we expect this kind of pressure to exit from the market?

We took a very conscious decision for the full-year guidance; we said that this is going to be like this. And honestly we will be leaving it to month-to-month. Some markets are getting better, some markets continue to be under stress. So on a whole, I think lack in 25,000-30,000 units per month is what we can talk about and we have not unfolded month-on-month.

Does Nigeria continue to be one of the key concerns? Do you expect the situation to normalise any time soon?

Absolutely everything in our control is quite okay in terms of brand value, market acceptance and market share. The macro economic factors of foreign currency management, dollar availability etc are something we have to simply wait and watch, and we can’t do much about it. And Nigeria is certainly one of the stress points.

In terms of the domestic market, the sales have been pretty steady on a month-on-month basis. How do expect the demand to pan out in the coming quarters on the back of a good monsoon and the 7th Pay Commission? Are you expected to uptick the guidance that you have given in terms of the total volume?

I think we have given a very aggressive guidance. It factored in a lot of work that we have been doing internally in terms of product launches. If you recapitalise it, last year, based on good product actions from January 15 to March 2016, we almost notched up from a 15-per cent market share to a 25-per cent market share. Similarly, a good pipeline of products is unfolding this year, too. And based on product action, plus factoring in improvement in economy, we had guided the domestic volumes and we are holding on to that guidance, which is indeed aggressive.

The three-wheeler space continues to be under pressure not just for Bajaj Auto, but for the industry as a whole. Any update on that segment?

In the three-wheeler segment, we have returned 25,500 units this month. The growth there has been very good. We have been improving market share month by month.

Published on September 02, 2016

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