Bajaj Auto domestic business ‘firing on all cylinders’: Prez


In an interview to CNBC-TV18, S Ravikumar, President-Business Development at Bajaj Auto spoke about their September auto sales numbers. He said that domestic motorcycle sales is up 23 percent. However, exports remain around 1.3 lakh units as expected, he added. Ravikumar further said that the company does not expect exports to offset domestic sales growth going forward. Below is the verbatim transcript of S Ravikumar’s interview to Latha Venkatesh & Reema Tendulkar. Latha: The sales numbers were a little more tepid than we thought, especially the export numbers. People were prepared for a 25 percent downtick, but this one has come in even worse than that at 1.21 lakh. Can you give us an idea of how the export sales will first pan out? A: You started on a good note talking about auto numbers and how they are received in the stock market, etc. So, I would like to continue on that a bit before coming to exports. Latha: Certainly your domestic sales are good. I will come to that in a bit. The domestic sales at 3.76 lakh, right? A: The total number is 3.76. The domestic is up 23 percent in motorcycles. That is at 230,000-231,000 units, so that is very good. However, as far as export is concerned, there is absolutely nothing new there and it is going on, as we predicted, at 1.20-1.30 lakh numbers. Some, as it has come in, it goes up to 1.30, some may see a slip into the next month; it comes to 1.21-1.22 lakh numbers, but that said I should tell you that if you see the last year’s breakdown between the first half-year and the second half-year; in the first half-year we did about a million and in the second half-year we did about 7 lakh odd units. So, going forward into this second half-year, our exports will be very much in line with what was delivered last second half-year. So, the base effect should catch up and the story of the exports nullifying the positive growth in the domestic will end with September. So, we should return to positive figures overall going forward in the second half. Reema: So, you are maintaining your export guidance of 1.6 million units for FY17? A: Yes. Reema: How soon are we likely to see your total volumes show a positive growth? A: Domestic again, if you look at domestic, we are firing on all cylinders. When I say cylinders, I have to get into sub-segmentation of the motorcycle market. On the basis of the entry segment, CT and Platina, we have very nicely moved up to almost about 35 percent market share from about 22 percent market share over the last 15 months or so, that is history, but the new Platina that we have launched recently, the ComforTec is extremely taken well by the market. Normally we used to do about 20,000-22,000 units a month, in the last month, we delivered almost 46,000 units of Platina. Total, CT and Platina put together, we clocked about 103,000 units, so we are firmly on very good ground. There is one more launch that is planned in this entry segment. So, we are well on course for a 40 percent plus market share in the entry segment. Now let us come to the value segment. In the value segment, V has been doing very well. Largely on the back of that we have clawed back from almost nothing to about 30,000 per month volume. Now, in this, our market share aim itself is 20 percent. As we already told, in this quarter, V is going to come up with a second variant from that V platform and though our volume target itself is about 80,000-90,000 units, this will be the second step. We will be marching well on the back of the second variant of V in the executive segment a well. In the sports segment, on the back of 2016 Avengers, we came back very nicely. We held on to our 45 percent market share. Pulsars have been ruling the roost for the last 15 years or so and the new 2017 Pulsars will be launched in this quarter. Again, we will go from strength to strength in this segment. Latha: When Rajiv Bajaj last spoke with us, he electrified the atmosphere by saying that he is going to give competition for Siddhartha Lal’s Royal Enfield. When is that vehicle getting launched and how much of it can we have in FY17? A: In fact, that is what I was coming to. We are calling that as a premium sports segment. In this premium sports segment, the 400 cc, perhaps a new brand is getting launched in this quarter, in Q3 and that is absolute blue ocean for us. The product is damn good, we have ridden it and it has taken very good reports from the auto journalists and all that from whoever has ridden it so far. So, that launch, once it comes out, it can add 10,000 units a month, it can add 20,000 units a month, we do not know. We have to wait and watch and here, certainly everything that is coming in is going to be additional. It is going to be too good for the topline as well as the bottomline.