Though the company recorded its best-ever annual profits in FY20, Bajaj Auto chairman Rahul Bajaj has called for intensified efforts to tackle the COVID-19 slowdown and its impact on business operations.
Addressing shareholders in the 13th annual report, Bajaj said, “In any event, it would be almost foolhardy to believe that demand will not get affected for at least the first two, if not three, quarters of FY2021. We will have to deal with this grave situation in many innovative ways.”
Bajaj Auto reported a net profit of Rs 5,100 crore in FY20 — an increase of 9.1 percent, compared to FY19. Its turnover, however, declined by 0.5 percent to Rs 31,652 crore during FY20 from FY19.
Though the central government partially eased lockdown in the first week of June, many automotive dealers restarted sales in May itself. They were based in areas that were not part of the designated containment zones.
While initial reports suggest that retail sales of two-wheelers have picked up with consumers preferring personal mobility over public transport, manufacturing facilities are operating at less than half their full strength.
“To my mind, the battle may have just begun. The national lockdown on account of COVID-19 has effectively wiped out 40 days, of which 32 have been in FY2021. With a partial easing of lockdown, our facilities at Chakan, Waluj and Pantnagar have opened, but are far from working at full pace,” Bajaj added.
Bajaj’s domestic sales of two and three-wheelers in May stood at little over 40,000, which were 83 percent less than the same month last year and less than half, compared to exports during in the same month. This is after the Pune-based company reported zero sales in April, along with the rest of the automotive industry.
While no company has provided a clear outlook for demand for FY21, the most common expectation is that of a pick-up closer to the start of the December quarter, after the exhaustion of the ‘pent-up demand’.
“We will have to use every lesson learnt in marketing and selling to recreate markets for our bikes and three-wheelers. We will have to delight our customers with a slew of new products. We will have to increase operational efficiencies everywhere. We will have to eliminate all unnecessary costs,” Bajaj added.
Though many new projects are running behind schedule, companies like Bajaj Auto are trying to make up for lost time by expediting work on the research and development (R&D) front. Bajaj is working on projects under its own brands like Chetak, and that of international brands like KTM, Husqvarna and Triumph.
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