Bajaj Auto on Friday said there is still some production constraint for its electric scooter Chetak due to semiconductor chip shortages and it is likely to be resolved by next month-end.
The company is expected to double its production capacity to 10,000 units per month from June, Eric Vas, President, Bajaj Auto Urbanite Business Unit said.
“We are trying to get to 10,000 (units) by June. It is a supply chain issue... We think we will be back to normal production in terms of meeting our requirements of the number of stores we are opening possibly by middle to end of May. After that it’s purely driven by what we want, we will get,” he said.
Asked about order backlog, he said there is a waiting period of 20-25 days, which should come down to three-five days, post the maximising of the plant utilisation from June.
He said the company had suffered production constraints due to the transition to the new battery norm AIS 156B, which came into effect from April 1, for enhanced safety. The constraints have been resolved to a large extent.
Network expansion
Vas said Chetak brand’s network currently spans across 88 towns through 105 dealerships and by September it is expected to reach up to 150 exclusive outlets in 120 towns.
Bajaj Auto would look at the market and calibrate again for expansion beyond these.
Vas said a key factor for taking such an approach is the uncertainty over the continuation of the FAME II scheme also, which was extended till March 31, 2024.
“One of the things which we should have better clarity on sometime by September is what happens to FAME II after March (2024). I think a lot of things depend on that output,” he said.
FAME II scheme
When asked if FAME II scheme should be continued for another two years, as suggested by a Parliamentary panel, he said the industry is of the opinion that cost of EVs will go up significantly if the subsidy is stopped and manufacturers could not afford to fully absorb the increased prices.
“I think prices will go up. It will stop the growth of the industry and that is why I am saying we need to calibrate very carefully when we’re opening (new stores for Chetak),” Vas added.