The revival in rural demand is no doubt the overarching theme in the two-wheeler segment. However there are some side hustles that also demand attention. In Bajaj Auto’s case, it is no doubt the interesting product mix coupled with lucrative pricing and the exports inching back gradually.
Dinesh Thapar, CFO, Bajaj Auto said, that “dollar liquidity is the biggest stifling factor affecting exports. But the good news is that inventory levels are down 30% YoY in key export markets. The key global headwinds going forward include geopolitical concerns and political stability. I do not expect a quantum shift in the near-term.”
If FY23 had been about how Bajaj Auto was struggling to stem the declining exports, come FY24, developments have no doubt taken a turn for better. From a point where India’s largest exporter of two-wheelers and three-wheelers, with exports to over 90 countries, saw 27 per cent decline in its exports last fiscal, it is about recovering some ground every month now.
If you look at the breakup of exports, almost 50% of Bajaj Auto’s exports are to major countries in Africa, 20% to Latin America, 20% to South Asia and Middle East and 10% to ASEAN region. That’s exactly why the recovery trend in exports make for some interesting observations. While month-on-month, Bajaj Auto has seen significant improvement in the number of vehicles shipped out, sequentially exports have risen 12% and the Africa volumes have seen 20% jump compared to what was exported the previous quarter.
The two-wheeler major has undertaken a systematic approach in this regard. Thapar explained that Bajaj Auto has set its “target to inch back to FY22 peaks of exports above 200,000 units. We are looking for short-term measures to unlock dollar availability to ship out products globally. Additionally, we are also keeping a close watch on the market share in key geographies globally. Our aim is targetting billing volumes going up.”
The export numbers are a long way off from its earlier peaks, Bajaj Auto is hopeful of the numbers improving bit by bit every quarter. While monsoon and marriage-season demand remained the triggers locally, it’s more of a dollar drama globally. Bajaj’s strategy continues to remain engaged with its customers so when the market does return to normal. They don’t have to deal with any dip in market share as they chart the recovery route.
