Bajaj Auto's Rakesh Sharma: Discounting will not stimulate declining auto sales

Bajaj Auto's domestic motorcycle sales in August declined by 21 percent year-on-year. However, the sales decline is in line with the industry as all major auto manufacturers have reported steep fall in August, said Rakesh Sharma, executive director of Bajaj Auto in an interview with CNBC-TV18.

He added that commercial vehicle (CV) sales were down 5-6 percent but better than the industry performance.

Talking about the company's international business, he said: “The business held steady; there was growth in motorcycles. We are very much in line with what has been happening in the last 3-4 months.

"However, there was a decline in commercial vehicle which we continue to experience because of Egypt, where we used to do 8,000-9,000 units a month is now zero for some time,” he added.

On growth Sharma said: “Between June and August there is no uptick worth talking about. So the decline in growth rate has been more severe in August because a large part of the country was also under heavy rains and that must have dampened .

“However, in the last 10 days or so there was a big improvement in walk-ins, inquiries and even retails," he added.

Talking further about exports, Sharma said: “The 70 countries we operate in are largely in the emerging part of the world and I would say that I would divide that into Africa, which is outperforming and we have seen a lot of stability in all our top markets in Africa.

“Our next largest market is Latin American which is unfortunately minus 3-4 percent growth level and it has been like that for some time lead by the decline in Argentina and government change in Mexico, things are just settling down. Therefore, we do not expect Latin American continent to start getting into double digit,” he further added.

On the company's business strategy, he said: “We have not resorted to discounting. I do not think discounting is going to stimulate someone. However, we have tried to make it easier for the customer to get finance schemes and that has been very helpful.”