Bajaj Auto’s domestic market sales return to 2 million mark after 3 years

Bajaj Auto, India’s fourth largest two-wheeler manufacturer (by domestic sales), has reported total cumulative sales of 2,001,391 units for FY2016-17, thereby marking its return to the two million unit sales milestone after three years in the domestic market. However, in March 2017,the company saw sales fall 14.33 percent YoY.

Bajaj Auto had last reported its domestic sales of more than two million units in FY2013-14, when it yearly sales stood at 2,099,230 units. In FY2015-16, the company had recorded total domestic motorcycle sales of 1,898,957 units. This accounts for an annual growth of 5.39 percent YoY.

In restoring its two million unit mark in the domestic market, the Pulsar brand, along with other motorcycle brands including the 100cc commuter motorcycles – CT100, Platina and Bajaj V – and the Avenger cruiser have all contributed substantially to the OEM’s annual domestic sales.

The Pulsar umbrella, which is likely to have topped amongst all other brands, is estimated to have sold a total of over 575,000 units for the company during FY2016-17. Following that are the CT100, Platina, V and Avenger brands, in accordance with the order of their contribution to the company’s overall yearly domestic sales. The final sales numbers are yet to be released.

Although the company has reported growth in its domestic sales YoY, a sharp decline in its exports reflect on the overall negative growth of 4.12 percent YoY for FY2016-17. Exports, on the other hand, are down to 1,218,541 units, which is a five-year low for the company.

How Bajaj Auto performed in March 2017
For the month of March 2017, Bajaj Auto has registered a decline of 14.33 percent YoY. The Pune-based company has sold 151,449 motorcycles last month as against 176,788 motorcycles retailed in March 2016.

The decline in Bajaj Auto’s March sales can be attributed to its early upgrade to BS IV emission standards, which in turn had resulted in a price hike across its product portfolio. The company, therefore, lost some sales to the cheaper pricing (of BS III-compliant motorcycles) by rival products.

Eric Vas, president, motorcycle business, Bajaj Auto, who recently spoke to Autocar Professional, had raised his concerns over the same. “We began producing BS IV bikes from September 2016 and shipping them to dealers from October. Progressively, we rolled out our entire range until January 2017, which is when we stopped making BS III-compliant vehicles altogether. Most of our dealerships have BS IV-compliant bikes. There will, of course, be some BS III inventory, which will finish off by end-March. From a market perspective, we will have a price disadvantage because a BS IV vehicle is more expensive (than BS III). There is additional equipment that you put on the vehicle to comply with the evaporative norms, exhaust emissions and other technical aspects that involve extra costs. So, obviously, we are concerned about the price advantage others might have if they put out a lot of BS III-compliant bikes in the market. However, how long that advantage will last?” he had questioned.

Vas is hopeful of further improvement in the market demand in the coming months.