Bajaj Auto chairman Niraj Bajaj has said it is difficult to predict when the current supply scarcity would end. In a letter to shareholders, he shared short-term concerns over the shortage of semiconductors.
“No modern automobile can exist without a slew of semiconductor chips. Motorcycles and top-of-the-line electric vehicles like the Chetak are no exceptions. It is difficult to predict when this supply scarcity will end. But till then, this will constrain your company’s production volumes, as it will for all other automobile manufacturers,” he said.
The company’s annual report for 2021-22 stated that its R&D team is working on the issue. “Our R&D team is working on this, while we are actively searching for alternate sources. Hopefully, this will be a thing of the past sooner rather than later. All said and done, there are good reasons to believe that Bajaj Auto will perform even better in FY23,” the company said in its outlook for FY23.
The report added that Bajaj Auto had overcome the challenges posed by Covid-19 in FY21 and turned a corner. The financial results could have been even better had the company not faced the crippling semiconductor shortage that constrained the production of the entire range of sports and super-sports bikes as well as the Chetak, the report said.
The company further said it is committed to the development of electric vehicles. The setting up of Chetak Technology as a fully owned subsidiary of Bajaj Auto would aid in the research, development, production and sale of EVs, it said. Bajaj Auto is also expanding its global manufacturing, R&D and engineering footprint. The company has incorporated a wholly-owned subsidiary in Thailand to set up an International Business Centre to oversee sales in the Asean region and an engineering design centre under this subsidiary.
