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Strong revival in demand for two-wheelers, three-wheelers face headwinds: Bajaj Auto

Coronavirus impact: In April-June, Bajaj Auto sold 1,85,981 units in the domestic market, down 69.55 per cent from 6,10,936 units in the same period last year

twitter-logoBusinessToday.In | July 26, 2020 | Updated 13:39 IST
Strong revival in demand for two-wheelers, three-wheelers face headwinds: Bajaj Auto
Bajaj Auto sees demand for two-wheelers

Bajaj Auto is witnessing a strong revival in demand for two-wheelers in both domestic and international markets. However, the three-wheeler segment is yet to pick up, stated Bajaj Auto CFO Soumen Ray. The company is still gauging if the demand for two-wheelers is a pent-up one or if the segment is already on a revival path.

"We are seeing month-on-month improvement in sales. There was no sale in April while the decline was very large in May. June was significantly better than May and July is much better than June," Bajaj Auto CFO Soumen Ray told PTI.

Ray says that clarity on whether the demand is pent-up would only emerge by August. In April-June, the company sold 1,85,981 units in the domestic market, down 69.55 per cent from 6,10,936 units in the same period last year.

The three-wheeler segment, facing headwinds, is still struggling to pick up. "Such vehicles are mostly bought by taking loan. So why would someone like to start an EMI when there is no business? Passenger three-wheeler recovery will happen once this once these lockdowns end," Ray said.

The company's commercial vehicle sales (three-wheelers) in the domestic market during the first quarter of the current fiscal plunged by 93.87 per cent to 5,282 units as against 86,217 units in the April-June period of the last fiscal.

The company hopes to make a turnaround in the festive season. "If we have reasonably strong August then we are set for a good festive season," added Ray.

The CFO said that the installed capacity of the company is 63 lakh units per annum but they are operating at sub 50 lakh. He ruled out expansion of capacity.

Bajaj sold over 2,13,000 units in the international markets in the first quarter as compared with 4,71,691 units in the same period last year. KTM, in which Bajaj Auto has 48 per cent stake, is witnessing very strong revival in countries like Germany, Australia and the US, he added. During April-June, KTM reported sales of 33,220 units as compared with 38,267 units in the same period of the previous fiscal.

Also read: Bajaj Auto Q1 results: Profit halves to Rs 528 crore amid coronavirus crisis

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