Bajaj Auto hopes to wrap up this fiscal with sales of a little over four million two and three-wheelers.
Of this tally, exports will account for around 1.67 million units, said S Ravikumar, President (Business Development & Assurance), in a telephone interview soon after the company declared its third quarter results. Net profit for the quarter was Rs 952 crore, up from Rs 924 crore in the same period last year, while total income was Rs 6,596 (Rs 5,673) crore. The EBITDA margin was 20.6 per cent.
Bajaj also posted its January vehicle sales on Friday where the 10-month period this fiscal has thus far generated a tally of 3.31 million motorcycles and three-wheelers. Exports have accounted for 1.39 million units and Ravikumar said they are “doing nicely now” thanks to the revival of key markets like Africa.
Domestic market
As for the domestic market, the recent launches of the Discover 110 and 125 as well as the Avenger 220 are expected to prop up motorcycle sales.“We now have a full portfolio of bikes,” added Ravikumar while referring to the CT100 and Platina in the entry space with the Discover and ‘V’ taking up positions in the executive commuter slot. The Pulsar and Avenger are at the premium along with the more recent Dominar 400.
Bajaj Auto’s share in motorcycles is now 16 per cent and it remains to be seen how quickly the new Discover duo notch up numbers and grow this component to 20 per cent. Honda is now leading the executive commuter 125cc space with its Shine with Hero not too far behind with the Glamour.
Ravikumar said the company’s three-wheeler business had been doing particularly well both in the cargo and (diesel) passenger categories. Between April and January this year, the share of cargo in the domestic market has increased to 19 per cent from 11 per cent in the same period last year. The diesel passenger segment has a 37 per cent share and continues to grow both here and in export markets.
KTM bikes
The company’s Chakan plant near Pune produced 92,000 KTM bikes (branded Duke in the 125cc-400cc range) during calendar 2017 accounting for nearly 39 per cent of the total global output of 2.39 lakh units. Austria, the headquarters of KTM, accounted for the balance production of 1.47 lakh units.
Bajaj has a 48 per cent stake in KTM and the relationship between the two has grown strongly for over a decade now. The Duke motorcycles made in Chakan are exported to a host of countries ranging from the US and Europe to Australia and Japan. The bigger and more powerful range is produced in Austria. KTM and Bajaj are now looking at a larger play in the ASEAN region where a beginning has been made in Indonesia.
Going forward, the Chakan facility will also take over the responsibility of producing Husqvarna motorcycles, the Swedish brand which KTM acquired from BMW Motorrad in 2013. Production will begin by end-2019 and the retail plan for India will see the two premium brands (Husqvarna and KTM) housed in a single store akin to the model in the US and Europe.
Local production of the Husqvarna range will also keep costs at competitive levels on the lines of what has been achieved with the KTM range produced in India. By 2022, the aim is to produce 400,000 bikes split between 130,000 Husqvarnas and 2,70,000 KTMs. Of this total output, Chakan will take up 150,000 units with Austria accounting for the remaining 250,000 motorcycles.
In the next 2-3 years, the plant will also be home to the UK’s Triumph brand where motorcycles in the 300cc-700cc range will be developed and exported to a host of markets.