Turmoil in Nigeria behind exports fall; see bounceback: Bajaj

A sharp fall in exports, led by turmoil in Nigeria, was offset by high growth in domestic markets for the month of April for Bajaj Auto, says S Ravikumar, President, Business Development."So, net-net we are at almost at the same level in April 2016 as compared to April 2015," he told CNBC-TV18 in an interview.With the Nigeria market slowly stabilising and other export markets like Argentina, Nepal and Egypt doing well, Ravikumar senses a bounceback in exports in the coming months.Below is the transcript of S Ravikumar’s interview with Latha Venkatesh and Sonia Shenoy on CNBC-TV18.Sonia: Every month we talk about how exports is just not picking up and this month seems to be no different.A: If I may, I will just talk to you about the total mix now. Like you said the domestic grew by almost 30 percent. That is the highlight of this particular month and the exports, of course fell by 30 odd percent. So, net-net we are at almost at the same level in April 2016 as compared to April 2015. That said, you started off with exports, but I would like to start with domestic because domestic has been a star performer this month. Of course, I will come back to exports.In motorcycles from 1,60,000 units to about 2,00,000 plus units, it has been a great story of a 25 percent growth. From January, 2015 onwards, every single model launch that we have made – CT 100, Platina, Avengers, everything has done wonders. Not one has been a failure, everything has been a success. And on the back of that, we are finding a good growth in numbers. We have a rough estimate of the industry growth. It has grown from almost 8,80,000 to in our estimation to something like 9,70,000 or so. From 14 percent market share in January when we started all this new launches, today we are sitting pretty at about 20 percent market share. Avengers have added about 24,000 units. V, which was a later launch is at 24,000 units. So, that has been a great story. And if I just look at April, 2015 to April, 2016, of the total growth in numbers we would have garnered somewhere around 45 percent. That is our estimate now. That is again a very good thing that has happened in the domestic. In the commuters, basically at the lower end with the CT and the Platina, we are doing well. In the higher end of commuters which we call as M3 – we cut that into three pieces M1, M2 and M3 – in M3, from a 14,000 with the help of V, we have gone to almost about 37,000 units sale in that sub-segment. Things are doing really good in domestic motorcycles. That is where it is.Latha: Even then, exports were about 50 percent of your sales a year ago. Now they are a third of your sales – maybe 35 percent. It still matters to your overall number. I take your domestic story completely, but is the export story turning around at all? We are getting consistent bad news.A: I should tell you that the May order book that I have in hand, that will give a lot of cheer to everybody. It is about 1,52,000 units is what I am sitting on for the month of this May. And to give a nice colour to the story, our main problem was coming from Nigeria. Nigeria, because of the turmoil, a couple of months went completely dry. So, that is what has impacted March and April. Again, in the month of April itself, in Nigeria in retail, almost about 21,000 motorcycles have been retailed and about 2,000 units of three-wheelers have been retailed from almost nothing. So, with the currency stabilising at about 260-270 per dollar from a 400 per dollar type of a story, the confidence is coming back albeit slowly. And the market is recovering step-by-step.And again, out of this 1,52,000 units of May export orders, about 27,000 units are from Nigeria. So, things are getting better and we hope things will be a bit more better than May in the month of June. So, April, we already guided last time, if you remember, about 1,05,000. That is what has been delivered. And if I look at further markets like Argentina is quite okay and Nepal has bounced back quite nicely. Whatever we planned for Egypt in the month of April has sailed out. So, we have to watch a couple of places but this 1,50,000 plus in the month of May should be good to come by. On the back of that and again, I should talk about domestic and three-wheelers, three-wheelers in domestic, we grew by 82 percent. That is a stupendous growth almost about 25,000-26,000 units coming from domestic alone and within that almost about 1,000 units, slightly under 1,000 units coming from the new cargo launch. Cargo is settling down very neatly. So, that is a story. Domestic on a strong footing, export recovering and in the month of May, we should see the total numbers upwards of 3,70,000, maybe 3,75,000 or so.Sonia: And what kind of a run rate can you generate in the coming months, both June and July because you did mention in May and June, you expect a good recovery in exports and the domestic pace to pick up.A: The domestic pace is quite okay and all these new launches are solid step jumps in both volumes and market shares. Exports we will play by month-by-month. But that said, should be certainly okay, because even the month of April 3,30,000 is average a million a quarter type of a run rate and that is improving substantially in the month of May. About June numbers, we will talk when we talk next time.Sonia: Wanted to know what were the exact Avenger sales that you did this month? In the month of March, you did about 26,000. What did you clock-in in April and what could the monthly run rate going ahead?A: Avengers are still doing good in all parts of the country. We did 24,000 in the month of May and anywhere between 25,000-30,000 run rate per month is quite there.