Lagos, the financial hub of Nigeria, recently banned the use of commercial motorcycles and three-wheelers following the rise of fatal accidents in the city.
Nigeria is one of Bajaj Auto's largest export markets, and the news, and a 22 percent decline in January two-wheeler domestic sales in Q3, caused shares to fall on the BSE by over three percent.
The government in Lagos imposed the ban on motorcycles that were running commercially as well as auto rickshaws on February 1. The increased number in vehicles have reportedly added up to four hours to the daily commute in the city. Known as Okadas, commercial two-wheelers have become a popular mode of transport because of their ability to snake through traffic alongside three-wheelers, known as kekes. This has also unfortunately given rise to the number of fatal accidents.
However, Bajaj says that the ban isn't of major concern to the company. In an interview to CNBC-TV18, Rakesh Sharma, Executive Director of Bajaj Auto said that though Nigeria comprises of about 25 percent of the company's exports, Lagos in itself, contributes to only 6-7 percent of the total exports in two-wheelers, whereas that of three-wheelers is about 10 percent.
Sharma also said that they are not expecting any significant hit to businesses due to the news from Nigeria. "This kind of thing keeps happening in international business; Bangladesh did it last year. So it’s not a significant event from our perspective, not for Nigeria and not for international business. So I don’t see any reason to be circumspect about the future of Nigeria in our portfolio," he said.
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