Pickup in domestic demand counters slowdown in exports for Bajaj Auto

Pune-headquartered two- and three-wheeler major Bajaj Auto reports sales of 331,278 units for April 2023, which was 7 percent higher YoY and 14 percent higher over the previous month.

It is important to note that the first month of the new fiscal usually starts a bit slow and in some cases in a year-on-year degrowth. For Bajaj Auto the pickup in demand from the domestic market has been able to counter the slowdown it faces in the export market.

In fact, in a recent virtual interaction with select media Dinesh Thapar, CFO, Bajaj Auto shared that there was a pick-up in demand for the 125cc and above motorcycle segment in the country. In addition, there was also a significant improvement in the supply chain which helped it improve production.

During the period Bajaj Auto sold 287,985 motorcycles, which includes 181,828 units in the domestic market and 106,157 units in the export market. This translates to a growth of 95 percent YoY degrowth of 44 percent YoY respectively.

The three-wheeler business saw sales of 31,344 units in the domestic market and 11,949 units in the export market.

The automaker has been facing headwinds in its export business due to the challenges of Forex reserves in its key markets. Then there is also a slowdown witnessed in demand for entry-level bikes, which makes up a good chunk of the export volumes.

However, the company has benefited from the improved demand for Pulsar, KTM and Dominar family in the domestic market. On the other hand, it is also working on debottlenecking production of the Chetak e-scooter.

For FY2024, the company is looking at a Capex of around Rs 750 crore, of which a majority of the portion will go towards the introduction of its first electric three-wheeler.