Bajaj Auto’s dependence on imports below 5 percent: China boycott to have negligible impact

Electric scooters will see a bigger effect than 100 cc motorcycles, but that is a small part of Bajaj Auto's portfolio. As per the company, the challenge of interruptions and delays can be managed through a safer inventory management, however, a complete cessation of imports will be even more challenging and will need some time.

By:Published: July 3, 2020 10:23 AM

 

The ongoing stand-off with China is unlikely to have any significant impact on Bajaj Auto as the company’s dependence on imports from the country directly or indirectly through major vendors is less than 5%. Over the last three years, the company has reduced its overall dependency on imports by 50%, Bajaj Auto executive director Rakesh Sharma said. “In the last three years, we have halved our dependency on imports, not just from China,” Sharma said. “We have found it is important to consider qualitative factors along with commercial factors to make a holistic evaluation and when that is done there are strong positives for India-based vendors,” he added. However, Sharma pointed out, there would be some categories of components where commercials play a major role and Indian vendors would find it difficult to match the costs of Chinese sources.

Electric scooters will be more affected than 100 cc motorcycles, but that is a small part of Bajaj Auto’s portfolio. “The challenge of interruptions and delays can be managed through safer inventory management, but a complete cessation of imports will be more challenging and will need time to overcome,” Sharma said. Like all automotive industry players, Bajaj, too, sources alloy wheels from China. Some transmission parts and electrical/electronic components, too, are sourced from the country. Creating alternatives to Chinese imports of these parts is a challenge as it contributes to their product’s competitiveness, Sharma said.

Last year, Bajaj Auto directly imported components worth Rs 600 crore from China and a similar amount through suppliers. “We do not see a major shift in our levels of imports. They are tied to the performance of our products in the market as well as a commercial evaluation of different sources,” he said.

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