Bajaj Auto says December growth in 125cc motorcycles 2x industry average

Bajaj Auto had a solid December with domestic sales of 125cc motorcycles at nearly double the industry average. Rakesh Sharma, Executive Director of the two-wheeler major said, exports saw some delays and disruptions due to the ongoing crisis in the Red Sea. However, there was no loss.

A: December was a great month. Usually, December, following on the heels of the festive period of October November sees a big drop, but we did not see that big drop. It was in line with our strategy, which has been to focus on the top half of the industry. And I think over there, even in December, we outpaced the industry in domestic motorcycles by almost two times. So giving further expansion of market share in that very strategic 125 cc plus segments.

The newer businesses like Chetak did well. We continue to garner market share and the supply chain keeps expanding its performance. So we breached the 10,000 mark from a registration point of view in December as well. So that was very good. There was no sort of fall off in the Triumph sales, which also again augurs well for the coming months and quarters. So December retail was almost entirely equal to the festive period, November period sales.

The three-wheeler business keeps matching its market share at 80%, expanding the CNG and growing the electric three-wheeler component in the business.

There was a marginal improvement in exports the quarter over the quarter two. So we are hoping that the macroeconomics and the geopolitics starts to turn positive in the coming quarters, we are well positioned to harness any improvement over there, but for the moment it's watch out - we are still watching the export front.

A: You are right, because of the little fracas in the Red Sea, we did face some disruption. The shipping companies have been quick to increase the freight rates a bit, but you're also right in observing that it is not going to last but for the moment, yes, shipments were delayed to some parts of Latin America and Africa.

A: So certainly, we expect quarter four to be better than quarter three in exports. But the caveat is always the volatility in the currency market, which seems to be easing up to some extent. But then you also saw things like the major devaluation in Argentina, which is an important market for us, and Nigeria also. So, however, as you said, the trend is that things are calming down. Now what's the rate at which things return to normalcy is something which we can only wait and watch but I expect quarter-four certainly to be better, marginally better than quarter three.

The second question that you asked, our market share from a retail registration point of view, in domestic motorcycles in the top half of the industry is now running at 31-32%. So it's very close to leadership. I don't have the exact numbers as to what happened in the last couple of days. But that's the region in which we are operating. And we are, of course, looking at a number one spot in the months to come. We are well positioned with the entire Pulsar range now almost refreshed, and a few more launches will hit the market rapidly between now and April, every month, almost. So there will be a lot of activity. And I think that should provide us a good boost to rest leadership of that segment.

A: No, not really. There was no loss. There are some delays. But, there are channel stocks. So as yet, the disruption has not affected us materially.

A: The retail number is about 2,500 units, we are running at that rate, which is what the number for November was also and this is in the 40-45 odd stores, which have been sort of newly launched. So it's not an all-India number. Quite significantly some of the areas we are already starting to see market share of 15-20% levels, again from a registration point of view, important markets like Kerala, we are not there across Kerala. But Trivandrum, Cochin, we are striking above 15%, Bangalore, certainly above 15%. So, wherever the store footprint has expanded, and people have had the time, like say two, three months to sort of start talking about the brand and activate things locally, we're seeing a very good movement in our market share, we will continue to expand and we are hoping to sort of close the next quarter by almost doubling the store network, which is there today. And that should sort of boost our retail quite a bit.

A: I can say that as we enter 2024, I must say it is after quite a while very promising from where we are standing both from an industry point of view, our class of customers seems to have returned, and there is certain optimism and there is a little bit better purchasing power. So, the economic recovery is finally reaching our class of customers. We are very well positioned in terms of refreshed, new range, pipeline of products, which are going to hit the market. And what happens is whenever there is optimism in the market, and with that backdrop, new product introductions always get you a lot of mileage. So, to that extent, the ducks are pretty aligned as we see it for the forthcoming months.

The newer businesses like Triumph and Chetak, where we started to get our sort of supply chain and our front end in position - they have been validated and accepted and we are now looking at a period of scale-up. So we are getting our act right and getting the basic apparatus right, we are now moving into a phase of scaling up these newer businesses in 2024.

The export recovery, as I said, is really - there is not much we can do, and we don't want to sort of do things that will counter macroeconomics. We have steadfastly gotten to our pricing and margin profile because we don't want to use that bit to counter exchange rate volatility. So from a mix, and a margin point of view, the export business is extremely well positioned. It's just that the volumes now completely depend on the recovery of some of these key markets, in which a few green shoots are there. And on the other side, at this point, we are not seeing pressure from the cost side. So when you put all these things together, it does look promising. My fingers are crossed, that there shouldn't be any geopolitical or macroeconomic disruption. We should navigate the election period properly, and it looks like a good time for the industry.