How Bajaj Auto’s highest ever exports is leading to lower domestic bike prices!

The share of exports has risen to 45% of total dispatches in the April-December period. Total exports rose 7.25% on a quarterly basis to 5,62,772 units in Q3, led by motorcycle shipments to key markets in Africa, Latin America and South-East Asia.

By:Updated: January 7, 2020 12:48:59 PM

Exports are powering Bajaj Auto’s monthly and quarterly sales this fiscal, even as demand in India continues to remain in the slow lane. The share of exports has increased in FY20 as key export markets have fared well. The automaker reported its highest-ever shipments to export markets for the quarter ended December.

The share of exports has risen to 45% of total dispatches in the April-December period. Total exports rose 7.25% on a quarterly basis to 5,62,772 units in Q3, led by motorcycle shipments to key markets in Africa, Latin America and South-East Asia. Motorcycles comprised more than 85% of total exports. However, three-wheeler exports declined 19% in the April-December period due to regulatory changes in Egypt and Sri Lanka. These weaknesses offset strong sales in Bangladesh and Nepal, according to analysts.

In the Q2 earnings conference call, Rakesh Sharma, chief commercial officer and executive director, had said sales in Egypt had slipped to 3,000 units per month in Q4FY19 from 8,000-levels in previous quarters as a new permit system came into effect. Bajaj Auto had stopped exports to Egypt in Q1 and Q2 to enable inventory clearance. The company had indicated that it would gradually resume exports to the country in Q3.

The automaker has used the gains made in the exports market to offer competitive prices in the domestic market. Analysts believe the strong export performance has enabled the company to offer high discounts and undertake price cuts to spur sales in the domestic market. The company’s margin has steadily declined since the slowdown began. In the quarter ended September, operating margin fell to 16.9% from 17.9% in the year ago period.

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