Bajaj Auto may post negative growth in Q1 on poor bike sales

Written by fe Bureau | Chennai | Updated: Jun 29 2012, 07:00am hrs
Bajaj Auto expects to post a negative growth in its domestic motorcycle sales in the first quarter of this fiscal as the retail sales continued to decline. In April 2012, the company reported a 2.17% growth to 200,228 units against 195,971 units in April 2011, however, it reported a negative growth of 5.30% in May 2012 to 206,751 units against 218,321 units sold in May 2011. In the first two months the company reported a negative growth of 1.77% in the domestic motorcycle sales with a total volume of 406,979 units against 414,292 units sold in April-May of 2011.

Interestingly, in the first quarter of 2012 fiscal, the company recorded total motorcycle sales of 963,051 units (828,391 units in Q1 FY11), a growth of 16%. With negative growth of 1.77% being recorded in the first two months of the first quarter of 2013 fiscal, the company expects to end the quarter with a major negative growth on the domestic motorcycle sales front.

On the other hand, the industry has grown 6.89% in the first two months of 2013 fiscal on domestic motorcycle sales front with a total volume of 1,749,236 units against 1,636,474 units sold in April-May 2011, according to data.

Speaking to the FE, K Srinivas, president (motorcycles), Bajaj Auto, said: It is a challenging time for us. The retail market did not pick up as expected in the first quarter of this fiscal due to petrol price hike and inflation. We hope the trend to continue in the second quarter, too, as far as Bajaj is concerned in the domestic motorcycle front owing to less than normal monsoon and delayed festival season.

He, however, said that the company is confident that the domestic motorcycle market will pick up in Q3. We have lined up two more motorcycles during the year to shore up our sales. It remains to be seen how the monsoon progresses, which will help the industry as well as Bajaj to revive its growth momentum, he said.

Even during January-March quarter of last fiscal, Bajaj Auto sold only 616,516 motorcycles in the domestic market against 617,255 units in the same quarter of the 2011 fiscal, a marginal negative growth.

On the export front, the company, however, fared better with 12.54% growth in April 2012 to 142,096 units against 126,264 units exported in April 2011 and a 15.55% growth in May 2012 to 115,171 units against 99,668 units exported in May 2011.