Bajaj Auto has been a consistent performer when it comes to two-wheeler sales in India and exports, but the overall slowdown in demand for entry-level motorcycles seems to be taking a toll on the company’s performance.
During April-November 2022, the company sold a total of 1.2 million two-wheelers in the domestic market (+6% YoY) and 1.14 million two-wheelers in the export market (-23% YoY) taking the total sales to 2.3 million units (-10% YoY).
While for Bajaj Auto exports have played a key role, and usually make up for almost half of its sales, this time around, the softening in demand from the African region, the dollar exchange rate, has brought the exports in the red.
But the company believes that in the last four months there is some sort of improvement and stabilisation happening in the global market, which would possibly help regain some of the lost ground.
November performance
Looking at the company’s November sales performance, the overall domestic sales were down 15 percent, while exports were down 30 percent YoY respectively.
A closer look at the model-wise data points out that in the domestic market, barring the Pulsar range and Chetak e-scooter, all products were down significantly, in fact, the sales of the company’s most powerful offering the Dominar, the sales were down 59 percent YoY albeit a low-base.
In November, the company sold a total of 119,367 two-wheelers in the domestic market, compared to 140,909 for the same period last year. On the export front, the volumes came at 130,364 units, compared to 187,561 units last year.
Slowdown in demand for sub-125cc segment
It is important to note that the sales of entry-level two-wheelers in India have been under pressure due to multiple factors, such as an increase in raw material prices leading to price hikes for the models, lower disposable income in tier 2-3 markets, migration towards premium products and lack of refreshments in the entry-level segment amongst others.
A similar trend was also observed for Bajaj Auto’s exports. Barring the Pulsar and Dominar, all products were in the red. The Bajaj Platina saw the maximum impact with 87 percent degrowth on a YoY basis.
However, the company feels that the sales for last month should not be seen in isolation but as a combination of the festive period which was in the October – November period, which was still on a positive note.
Uptick in demand for powerful motorcycles
The overall two-wheeler industry is seeing the migration of the new customer base towards higher displacement products. On one hand, while there has been slowdown in the demand for entry-level motorcycles (100cc-110cc), the 125cc segment and above segment have seen better than anticipated demand. This has partially is offsetting the slowdown from the entry-level products. As part of its strategy to drive growth, Bajaj Auto is looking to introduce new models and expand platforms for offering a range of choices for customers in the 125cc+ segment.
