May 02, 2013 05:25 PM IST | Source:

Bajaj Auto April sales down 10%; sees higher May sales

India's second largest two-wheeler maker Bajaj Auto's total sales in April declined 10 percent year-on-year to 3.44 lakh units, as sales remained sluggish in the domestic market and exports also slipped.

Moneycontrol  Bureau

India's second largest two-wheeler maker Bajaj Auto's total sales in April declined 10 percent year-on-year to 3.44 lakh units, as sales remained sluggish in the domestic market and exports also slipped.

Its total motorcycle sales fell 12 percent to 3.01 lakh units, the Pune-based company said on Thursday.

Three-wheeler commercial vehicle sales in April, meanwhile, rose 10 percent 43,351 units.

Total exports tumbled 23 percent to 1.30 lakh units, last month.

Hero MotoCorp, India's top two-wheeler maker had on Wednesday reported 10 percent decline in April, while TVS Motor's sales were down 6 percent in the domestic market. Honda Motorcycle & Scooter India meanwhile saw its sales last month gain 31 percent in the domestic market.

Bajaj Auto's MD Rajiv Bajaj told CNBC-TV18 he expects sales in May to be higher than April. The recent sales trends at its rivals suggest, consumers are shifting from Hero to Honda, he added.

Also read: Bajaj Auto has target of Rs 1,995-2,000: Hemant Thukral

Below is the verbatim transcript of his interview to CNBC-TV18

Q: Can you just break-up that 3.44 lakh number for us between motorcycles, exports etc?

A: Our motorcycle sales 300,000 and that is split - 200,000 domestic and 100,000 exports. The three wheeler sales, 43,000 that is about 29,000 exported and 14,000 sold domestically.

Q: Numbers are better than the March numbers clearly but on a year on year basis that 10 percent kind of de-growth continues – does the market continue to be very sluggish?

A: I would say this. Actually of one looks at our domestic motorcycle sales 200,000 versus 200,000 last year that is pretty stable. It is actually on the export front, where motorcycle sales are down from 140,000 to 100,000 motorcycles. I would actually say that if one looks at the April export sale of a 100,000 motorcycles.

The export motorcycle sales this April was a 100,000 versus 140,000 last year. However, I wanted to clarify that the sales of 100,000 motorcycles in the export market this year is pretty much normal level of sale. Typically every month whereas that in April last year was higher on account of a spill over of March into April which happens sometimes at the year ending.

Depending whether we receive the mate receipt or not in terms of containers being put on the ship. Last year March was unusually low in terms of export sales especially of motorcycles, which was not the case this year. Therefore April this year looks lower than last.

However, actually April 2013 motorcycle exports have been pretty normal at a 100,000 units. More importantly what has been heartening for us is that domestic motorcycle sales in April at 200,000 have been almost same as 200,000 in April last year.

Q: What are the early signs in May because I believe this is a big wedding month this year? Are you beginning to see early signs of this month being significantly higher than April?

A: Yes. There is no doubt that this will be a big month. However, equally it is true that June will then be rather a weak month. Sales of these things tend to average out. We can try and infer something from what happened in April in terms of total domestic motorcycle sales. April this year, the industry was at eight hundred and forty thousand versus eight hundred and sixty five thousand last year. So almost flat, technically a dip of three percent.

What is interesting to note is that all players including Bajaj, TVS and Yamaha were the same as last year. What has happened is it is Hero’s motorcycle sales that have dipped from 500,000 to 430,000. That is down by 70,000 and Honda Motorcycle & Scooter India (HMSI) has gained 75,000 to 115,000.

What we are seeing is perhaps two events – 1) Consumers continue to gravitate from Hero to Honda. 2) Whatever loss is there in the market the end of it the net loss is that of Hero’s.

Q: How do you explain this phenomenon that market shares are not changing between the other players, it is only between Hero and Honda Motors that any kind of churn is going on?

A: Fundamentally, I believe personally it comes that it is the brands and not products. Those that always wanted to buy into the Hero Honda were anyway buying a Hero Honda. Some who wanted something more than just mileage was coming to us or Yamaha or TVS etc.

Now that Hero and Honda has split consumers have to decide which way they want to go. Not in large numbers but some consumers certainly is seem to prefer moving to Honda than staying with Hero.

Q: How is the three wheeler market shaping up? Do you continue to face difficulties in markets like Sri Lanka and Egypt?

A: Yes. It is not smooth sailing and Sri Lanka is stable. Fortunately Bangladesh went through some instability last couple of months, but it is normalising now. Unfortunately Egypt’s their situation is not good. They continue to have issues with foreign exchange so there is physically inability to provide dollars to buy the three wheelers so that is a problem.

On the other hand, we are doing well in the domestic market especially in the diesel three wheeler market. I believe a couple of days back the Delhi government has moved to Supreme Court to remove the restriction on the cap on the total number of three wheelers. If that were to happen then expect that to really boost demand.

Follow us on
Available On