Bajaj Auto slips on Sri Lanka import duty hike
Bajaj Auto shares slipped over 2% on Monday on fears that a sharp hike in import duty by Sri Lanka would hurt sales of India's second largest two-wheeler maker in the island nation.
April 02, 2012 / 14:46 IST
Moneycontrol Bureau
Bajaj Auto shares slipped over 2% on Monday on fears that a sharp hike in import duty by Sri Lanka would hurt sales of India's second largest two-wheeler maker in the island nation.Sri Lanka raised import duty on petrol powered three-wheelers to 100% from 51% effective April, according to a PTI report.While Bajaj Auto also exports motorcycles, its three-wheeler auto rickshaws find many takers in Sri Lanka. The Pune-based company exports around 10,000 three-wheelers every month to Sri Lanka. Many people there buy Bajaj's three-wheeler rickshaws for personal use, a key reason that had prompted MD Rajiv Bajaj to announce that its four-wheeler RE60 it launched in Jan could be sold in Sri Lanka first before even India.Analysts say this sharp hike in duty, which Bajaj Auto will most likely pass on, could hurt this demand for three-wheelers.CNBC-TV18 said quoting sources that the company is in talks with partners in Sri Lanka weave its strategy post this duty hike. Bajaj Auto sells vehicles in Sri Lanka through its local partner David Pieris Motor. Bajaj's sales there rose 76% in 2010-11, according to the company's annual report.Between April-February, Bajaj Auto's total exports were up 30% from a year ago to 14,72,133 units. It exported 76,558 three-wheelers in October-December, up 35%.Bajaj Auto shares were down 1.7% at Rs 1,651 on NSE in afternoon trade.
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