Bajaj Auto may fall short of capacity in 12 months, says MD

By: | Published: April 21, 2015 12:48 AM

Bajaj Auto may have closed FY15 on a negative note with a 2% drop in total sales of motorcycle and commercial vehicle to 38.11 lakh units...

Bajaj Auto may have closed FY15 on a negative note with a 2% drop in total sales of motorcycle and commercial vehicle to 38.11 lakh units, but the company continues to be optimistic about its prospects for FY16. Bajaj is planning to add a second facility at Chakan to expand motorcycle manufacturing capacity.

Bajaj Auto MD Rajiv Bajaj told a TV channel that with FY16 sales expected to grow 20%, the company could fall short of capacity in the next 12 to 18 months so they had to look at adding capacity. Bajaj expects the domestic motorcycle sales to be at around 2 lakhs a month while exports are estimated to be at 1.66 lakh units a month. Total exports for FY14 has been pegged at 20 lakh units which would be a 11.11% growth over FY15 exports.

Bajaj has indicated that the work on the plant would start next year and have an initial capacity of 50,000  motorcycles a month. The company currently has a capacity to manufacture 5.4 million motorcycles with 2.4 million units made at Waluj, 1.2 million at Chakan and 1.8 million at Pantnagar. The additional capacity will take the total motorcycle capacity to around 6 million units a year.

The company also has existing capacity to make six lakh commercial vehicles and 0.60 lakh units of the quadricycle. This takes the total existing capacity to 6.06 million units.

In FY15, the company manufactured 32.92 lakh motorcycles and 5.19 lakh  commercial vehicles and the quadricycle production did not start as it awaits judgment from the Supreme Court.

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