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Bajaj Auto forecasts 15-20% slide in motorcycle volumes for June quarter due to chip shortage

Rakesh Sharma, executive director, also warned that increasing cell prices may delay the pace of transition to electric vehicles

April 28, 2022 / 12:46 PM IST
 
 
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Bajaj Auto forecast a 15-20% slide in motorcycle volumes in June quarter from shortage of semiconductor chips.

Rakesh Sharma, executive director, also warned that increasing cell prices may delay the pace of transition to electric vehicles. He said this will impact mostly the domestic business unit and to a smaller extent sports brands in international markets.

April was the worst month in terms of semiconductor availability.

Bajaj Auto continues to face severe supply chain challenges, impacting the sale of motorcycles and commercial vehicles, the company said. The firm said a severe shortage of semiconductors led to a steep decline in the domestic motorcycle business.

Bajaj Auto reported an 18% decline in total two wheeler volumes in the March quarter while commercial vehicles volume fell 4% from a year ago. Domestic two wheeler volumes slipped 30% while commercial vehicles volumes dropped 8%.

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"Overall performance in Q4 was a reasonably strong one given the backdrop of weakened domestic demand, rising costs and supply chain dislocation -- amidst this we reported our second highest quarterly as well as annual profit," said Sharma.

On the cost side, the firm said it definitely sees some headwinds, and believes it may see about a 3.5% increase in cost.

Bajaj Auto's earnings before interest, tax, depreciation and amortisation fell 10% to Rs 1396 crore while margins shrank to 17.5% in March quarter because of high raw material prices and lower domestic sales.

International business for FY22 recorded the highest ever sales of over 2.5 million units. With sales of over $2 billion, exports now make up over 52 per cent of net sales in value terms, the firm added.



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first published: Apr 28, 2022 12:08 pm
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