After closing FY23 with record profit margins, Bajaj Auto—India’s third-largest two-wheeler maker—is ready to push the envelope on multiple fronts this year.
Due to make its debut in the electric three-wheeler space shortly, the Pune-based maker of Chetak and Pulsar, is also simultaneously preparing to launch its first mini Triumph in June.
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Rakesh Sharma, executive director, Bajaj Auto, said, “Dispatches (of electric three-wheelers) are imminent; they are under production. As soon as we get the FAME certification, the dispatches will be through.”
The company also claimed to have completed its field testing for the electric three-wheeler and is on schedule for a limited launch of both the passenger and cargo versions shortly.
Six years after announcing the partnership, Bajaj Auto is finally ready with the first motorcycle to be sold under the Triumph badge. To be made by Bajaj Auto, this new Triumph, which is set to foray in the classic motorcycle segment, will compete directly with the range of Royal Enfield.
All Triumph products through the partnership will be made at Bajaj’s new factory at Pune’s Chakan and sold all over the world. India and a very a few select overseas markets will be managed by Bajaj Auto while others will be managed by Triumph directly.
Following a crucial restructuring of its vendors who supply electric vehicle parts, Bajaj Auto is tripling production of its model Chetak, its only electric two-wheeler offering in India. This is the first significant increase in output of the model since its debut in January 2020.
The ramp up in production has also allowed the company to bring down Chetak’s price by around 13%.
“The EV supply chain has been restructured and a number of development programmes in collaboration with important vendors have made very good headway. This not only assures us the availability of more than 10,000 Chetaks (per month) going forward from June onwards but it also lowers costs that will make it accessible to more customers,” Sharma added.
Following adverse conditions in some of the company’s top-performing markets, Bajaj Auto’s exports plummeted 27% during FY23 to 1.82 million units. Last year, its total exports closed below its domestic total of 2.1 million units.
While some of such markets like Nigeria continue to remain affected, a gradual improvement in the economic conditions of these countries is expected to boost demand for Bajaj products by the September quarter.
The company further stated that while the demand is not an issue in several countries where it sells its products, the availability of US dollars for trading is an issue since the central banks have taken a cautious view.
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“The one piece which constrains our business is the availability of foreign exchange. That is the biggest volatile and uncertain factor. Our approach to managing the exports business in these turbulent times has been to stay the course because we have seen in the past the pendulum keeps swinging,” Sharma added.
“We lower our volume estimates by 4% but raise average selling price estimates by around 5%. We raise FY24 and FY25 EBITDA margins to 19.8% and 20.1%, respectively, to factor in a better mix and price hikes,” Nomura said in its report.
