Rajiv Bajaj on Bajaj Auto sales, price war and Siddhartha Lal's exit from Royal Enfield

Bajaj Auto’s total vehicle sales rose 2 percent in April to 423,315 units supported by highest ever exports of motorcycles, offsetting a 13 percent fall in commercial vehicle sales. Rajiv Bajaj, MD of the company, spoke to CNBC-TV18 about the numbers.

Bajaj said that retail sales in the auto industry remained under pressure.

“The weakness that we are seeing post festive season continues and you will hear from everyone progressively today on how YoY there is degrowth and retails are under pressure; they are under pressure for example, even in states like Maharashtra which had the strong festive season of Gudi Padva. So despite the positive seasonal inputs, the market for some reason continues to be soft,” Bajaj said on Thursday.

Talking about the business, Bajaj said, “Not only in terms of growth have we relatively outperformed the industry but we will also see when we will announce our results later in May that despite all that has been said about Bajaj Auto discounting, you will see that the same impact on margins is there for all those who have announced the result so far.”

“Therefore, what I want to say is we do not discount. For the last 9 months I am trying to explain that just because we sell one stock keeping unit (SKU) that is 10 percent of your portfolio at 10 percent discount doesn’t mean we are engaged in a price war or initiated a price war,” Bajaj added.

On the growth front, Bajaj said, “Our Platina brand has grown 77 percent YoY in April and that’s unheard especially at this time in the month of May we are looking at 100 percent growth for Platina. Similarly, at the other end of the spectrum, there are people who are moving up, who are choosing something better and that’s where we are doing well with the Pulsar that has again clocked double-digit growth in April and we are looking at over 20 percent growth in May as well. So that is what helped us in domestic motorcycles.”

Bajaj said that the inventory level is at 55 days plus and that they should be able to get back to 45 days inventory by June-July.

When asked about Siddhartha Lal's decision to give up all responsibilities at Royal Enfield, Bajaj said, “When you go through such a rough patch it is not for no reason. There has to be some strategic misalignment somewhere. I have my own view of what that might be but it would not be appropriate of me to say it now. I will tell Siddhartha (MD & CEO of Eicher Motors) when I see him because we are often in touch.”

“However, I will say it again that he is outstanding, Vinod is super outstanding. They will be back, no doubt,” he said.

Eicher Motors last month appointed Vinod K Dasari as the chief executive officer of its Royal Enfield unit after Siddhartha Lal's exit.