Bajaj Auto hopes to wrap up this fiscal with production of around five million units, said Rakesh Sharma, Executive Director, in a telephone interview on Wednesday.

Of this, exports will account for two million units, comprising motorcycles and commercial vehicles.

Thus far, the April-December period has seen Bajaj post volumes of 3.82 million units and is confident of maintaining the growth momentum for the fourth quarter.

The company posted a net profit of ₹1,102 crore (₹952 crore) for the third quarter this fiscal on a turnover of ₹7,879 crore (₹6,596 crore). The operating Ebitda margin, however, has seen a sharp fall to 17.1 per cent from 20.3 per cent in the same quarter last year.

According to Sharma, the company’s focus on the entry and sports segments in motorcycles has paid off rich dividends from the viewpoint of volumes growth.

Volumes grow

While monthly sales of the CT 100 and Platina have been averaging over 60,000 units each in Q3, the Pulsar and Avenger have been jointly clocking 75,000 units plus.

In the process, Bajaj has increased its presence in the entry segment to 37 per cent in this quarter (31.7 per cent in the same period last year) and to 45.7 per cent (40.5 per cent) in the sports category. The Platina 110 and Pulsar Neon have been the star performers lately.

Sharma was categorical that the company would continue to hone its product strategy in these two segments which have seen the fastest growth. This focus has also helped increase its overall domestic share in motorcycles to 20.3 per cent, up from 16.3 per cent in Q3 of last year.

If things go according to plan, Bajaj could exit this fiscal with a market share of over 22 per cent in bikes as more value-added variants come into these two key product segments.

Safety norms, price hikes

Going forward into the new fiscal, with new safety norms becoming mandatory from April in the form of ABS and CBS, there could be some buying resistance in the market owing to higher price tags.

Bikes will cost a little more and Sharma said any kind of change could leave customers feeling “rattled” even while reiterating that he did not see any big disruptions happening. The silver lining in the cloud is that the advent of these safety norms coincides with the marriage season in North India and the ensuing demand could hopefully weather the price hike headwind.

However, the bigger challenge will happen in April 2020 when Bharat Stage VI emission norms come into effect and see a significant hike in prices.

Sharma said this would be the period when “deft management” of the supply pipeline becomes critical as manufacturers gradually begin phasing out BS IV models and are set for the new BS VI era. It will call for astute planning where manufacturers, suppliers and dealers will have to jointly plan their production and sales strategies.

As for the Qute which is now ready to hit the roads, Sharma said the plan was to launch it in five States initially and gauge customer reaction to this quadricycle.

Being part of an all-new product segment, Bajaj will have its marketing teams observe buying behavioural patterns which will then help it plan out the second phase of the Qute’s launch across India towards October-November.

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