While Bajaj Auto is witnessing a small but steady revival in the export markets, Nigeria poses significant challenges.
The company's monthly sales in Nigeria, which typically hover around 50,000 units, plummeted to below 5,000 in April due to severe economic conditions and currency devaluation. Although sales have since rebounded to approximately 15,000 units per month, this figure remains 70 percent below the benchmark.
"This is still a far cry from the 50,000 benchmark. Compared to Q1 of the previous year, are down by about 40 percent in Africa, Rakesh Sharma, Executive Director of the company, said in a post-result analyst call on July 16.
High government debt, a rise in unemployment and shrinking oil output have severely dented consumer demand. Despite recent stabilization in the Nigerian currency, the impact of these economic challenges continues to be felt.
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However, the company is seeing positive trends in other regions. In the Middle East and North Africa, sales have increased by 20 percent, in Asia—led by the Philippines and Nepal—by 70 percent, and in Latin America (LATAM) by 26 percent, reaching or exceeding last year’s levels.
In recovering and growing markets, the company is significantly outperforming the industry and gaining market share. The new plant in Manaus, Brazil commenced production in June, and can produce up to 50,000 motorcycles per year, greatly enhancing Bajaj's production capacity.
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"Traction for our Dominar brand has been excellent and in the medium term, we expect Brazil to be amongst our top three international markets," the two and three-wheeler major added. Additionally, the company has begun exporting its small vehicle, the Qute, to Egypt, with 500 vehicles shipped in the first quarter, opening a new market segment for the company.
Despite the setbacks in Nigeria, Bajaj Auto is optimistic about the future. The company anticipates better performance in the second quarter compared to the first and expects continued growth in its export business.
Bajaj Auto shares closed 0.5 percent higher at Rs 9,718. The Bajaj Auto share price has rallied a massive 43 percent since the start of the year.
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