'Slower export recovery is a sign of bottoming out:' Rakesh Sharma, Bajaj Auto

According to Sharma, the company’s global retail sales are improving in two-wheelers, stabilising in three-wheelers, and the worst phase is behind us.

By Shruti Mishra calendar 26 Jul 2023 Views icon2815 Views Share - Share to Facebook Share to Twitter Share to LinkedIn Share to Whatsapp
'Slower export recovery is a sign of bottoming out:' Rakesh Sharma, Bajaj Auto

The demand weakness for motorcycles in the export market, which began at the onset of the financial year (FY) 2022-2023, has started bottoming out, as per Bajaj Auto Executive Director Rakesh Sharma. Primarily, two-wheeler exports from India have been hit by weak macroeconomic conditions, local currency depreciation, foreign exchange availability constraints, and regulatory issues in several key markets.

For Bajaj, exports constituted about 46% of the company’s overall sales in FY23, and in Q1 FY24 the company exported a total of 385,851 units. 

During the April-June quarter, the company's exports of two-wheelers and commercial vehicles fell for a second consecutive quarter by around 34% from a year ago period, but have started to improve sequentially. The company reported export revenue of Rs 3,280 crore during the quarter under review. 

According to Sharma, the company’s retail sales are improving in two-wheelers, stabilising in three-wheelers and the worst phase is behind. “Recovery over the last quarter in FY23 was driven by a 14% growth in Africa, on a low base. Latin America has remained steady. South Asia and the Middle East are improving, except Bangladesh, which was down sequentially. ASEAN volumes were significantly lower due to temporary dislocation in the market. So this does indicate a bottoming out of the sharp fall in retail demand in export markets, which had commenced in quarter one of the last year,” Sharma said during a quarterly media briefing. 

Notably, Bajaj’s retail sales have bounced back, particularly in Nigeria after the elections and the repeal of local currency costs. The company's business came to a near standstill in Nigeria on account of election-related unrest as well as demonetisation in February this year. 

However, the company is cautiously optimistic about global sales in the second quarter of FY24. Highlighting the challenges that still exist, Dinesh Thapar, Bajaj Auto's CFO, said in a post-earnings analyst call, that the most stifling factor for the company's export business is the strained dollar liquidity across countries. "The macroeconomic challenges that we are seeing - most prominently the scarcity of dollars, raging inflation, and political instability - will create short-term pain. Of course, in the longer term, it might still play out effectively,” he added. 

A major part of Bajaj Auto’s exports is in the 100-110 cc segment with models like Boxer, Platina, and CT. Additionally, Bajaj's flagship sports motorcycle brand Pulsar has also maintained a leadership position in key countries like Colombia, Mexico, Argentina, Guatemala, Peru, Turkey, Bangladesh, Nepal, and Egypt. The company is confident that its popular Pulsar models N250 and N160 have the potential to reach the top spot in their respective classes across the large markets of Latin American countries. 

Bajaj Auto Exports
Year Units Exports vs Overall sales
Q1 FY24 3,85,851 36%
FY23 18,21,240 46.36%
FY22 25,06,626 58%
FY21 20,54,247 52%
FY20 21,71,105 47%
FY19 20,78,730 41%
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