Bajaj Auto Expects Double-Digit Growth in Both Two- and Three-Wheeler Demand

Mumbai: Bajaj Auto on Tuesday said it is expecting good, solid double-digit growth in both two- and three-wheeler demand and it is aiming for the top position in the EV segment in the country.

In a post-earnings media interaction, Bajaj Auto Ltd Executive Director Rakesh Sharma said that the company would have put up a better performance in the previous quarter but for factors like inflation, supply chain issues and serious logistics issues, which “impaired” availability by 10- 15 per cent.

Sharma also said that the company may consider roping in a strategic partner provided that its vision strategies align with the brand.

“The demand hopefully will continue at this rate. Of course, not those rocking rates post-GST, but good solid double-digit or maybe let’s say 8-10 per cent growth rates in domestic. Both electric two- and three-wheelers are growing extremely fast because of the obvious reasons of operating economics of EV versus petrol,” Sharma said.

Domestic had a solid quarter with motorcycles, with good growth, he said and added that “we had launched a portfolio makeover post-festive last year, beginning November, around eight models particularly in the 150-160cc segment”.

“We saw our growth to be 1.5 times the segment growth as per Vaahan registration. And this obviously resulted in our market share expansion,” he said.

Going forward, the company will, in the next six weeks, completely makeover the portfolio by adding another 10 models, two of which will be absolutely new motorcycles under the Pulsar brand in the 125 and 150cc segments.

“So, by the time we are post-festive in October, we should have a completely new and upgraded portfolio, part of which is already in play, part of which is going to start unfolding from August onwards,” he said.

On whether the company was looking at a leadership position in the EV segment, Sharma said, “We want a leadership position, but it’s not going to be at the cost of compromising the bottom line. But yes, certainly we will aim for the number one position.” The company, he said, now has 12 models in the electric vehicle category, which is more than anybody else and gives it a very broad range of coverage.

The EV industry is growing at a very high pace because of the operating economics between gasoline and electricity as at present 24 per cent of scooters are electric and 45 per cent of the L5 three-wheelers are electric, he said.

The company earlier in the day said that its electric business revenues, which now stand at around 30 per cent of domestic revenues, were at nearly twice of last year’s level, even as tight capacity and constrained supplies limited its full potential.

“So obviously we will continue to introduce new products at regular intervals because we see this EV segment is growing,” Sharma said.

He said that regulatory things (such as the notification of Delhi EV policy) point towards the direction of the expansion of EVs and added that “so it’s not just the consumer-led expansion but also there is a regulatory support to the expansion of EVs. And we have been aligned to it for some time now.

The company is facing capacity constraints in both electric two- and three-wheelers. The demand for Chetak has exceeded production capacity, making the planned expansion important for improving availability and supporting international growth, he said.

Stating that the on-going KTM AG turnaround is very good and on track and added that “our approach is that KTM has to be run independently by the new KTM manager. We have facilitated, injected liquidity, we have facilitated the change of installation of new leadership over there.” “And we are facilitating improvement in cost structures through expansion of sourcing from more competitive places, most notably in India. After that, it has to be run. Now, in the future, if there is a strategic partner whose vision and strategies align with KTM’s, that is a question to be considered. That opportunity is always open. But it’s not that there is a hunt on for somebody to come in and start to participate in KTM,” Sharma said.

Bajaj Auto’s export run-rate has increased to around 2.50 lakh units a month from about 200,000 units and the company expects to sustain that level, he said.

Bajaj Auto said it saw a strong start to FY27 with record performance across volume, revenue and profit in the June quarter.

The company’s domestic business registered another solid quarter with double-digit growth across all businesses, driving revenues up 26 per cent YoY, according to the company.

Total sales volume during the quarter grew 29 per cent year-on-year to 14,38,251 units from 11,11,237 units. Domestic sales rose 11 per cent while exports surged 54 per cent, it said.

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