Bajaj Auto saw steady domestic sales in the month of April with a spike coming in on the export side.
In an interview with CNBC-TV18, S Ravikumar, President-Business Development at Bajaj Auto spoke about the April sales numbers and the outlook going forward.
Below is the verbatim transcript of the interview.
Anuj: The export number is the one that stands out, but domestic number is a bit soft. If you could tell us, from here on what could be the likely trajectory?
A: The domestic is a big fallout also because of BS-III, BS-IV confusion and the preponement that has happened though we did not carry any extra stocks in the pipeline. Huge discounting that happened has sort of preponed a lot of purchases for April.
In fact we expect from the month of May itself things to become much better for us; we expect good growth for us in domestic motorcycles from the month of May because that is the signal that we are picking up from the market and from our dealers and from the field. This will play out and so April was expected to be like this.
Same way coming to domestic commercial vehicles, there the hit has been hard because of this issue and here, it may take maybe a month more to payout as far as domestic three wheelers are concerned. So, that is the domestic story.
Sonia: You said expect things to improve in the month of May, from this run rate of 1.77 lakh that you have clocked in this month, what could the run rate improve to in May and June and what are you looking at as far as Dominar sales are concerned?
A: Sticking to domestic now, we are expecting that in the month of May we should be doing 200k plus as far as domestic is concerned and about June we can talk during our next interaction when we talk about May numbers. So, we will take it month-on-month.
We are seeing that the big impact of huge discount sale and all that, that will completely play out in the month of April and things should become absolutely normal May onwards as far as domestic is concerned.
However, speaking of Dominar, we have done 2,000 units in domestic and in the 350-500cc segment of the market, we have done very well. We are already number one there.
Sonia: 2,000 units you have done in Dominar this month, that compares to about 3,500 units last month, so, there has been a fall in Dominar sales?
A: It had been 3,000 units. From 3,000 units domestic, we are talking about 2,000 in this month. We are now concentrating mainly on the metros and the main cities and then after establishing it there, we will take it forward to other markets. KTM took almost a couple of years to come to this level of 2,000 per month levels and Dominar as a 400cc, it is having a very good traction. That is why in the 350-500cc bracket, it is already a leader and we think that it will have traction, it will take some more time to seep into the smaller cities and the volumes to build up but we will be concentrating mainly on the big cities now.
However, that said, Dominar exports have already started this month. We have already exported in the month of April over 1,000 units. We will have good traction from many export markets – Latin America, and other places. So, I think the total volumes for Dominar will keep going up from here.
Anuj: Any number on that, especially on the export front for Dominar, any number that you are targeting?
A: Let me talk about because you started by talking about exports in total, as you see, this month exports have been quite good for us. After a long time we have gone to this 1,52,000 units. South Asia, Nepal, and Bangladesh have done very well, Sri Lanka is still struggling, Africa has stabilised, in fact this month of April, not much exports into Nigeria but still we could make this number and Nigeria is again getting better with very good retails of almost of about 16,000 units in two wheelers in the month of April.
Apart from some up-down movement in Mexico depending upon what President Trump talks, the Latin America markets have been stable, Philippines has been doing very well, Malaysia, we are ready to go and everything is done and ready there. So, exports, still we will take it month-by-month because not all problems are behind us, not all countries are stable, and not all currencies are stable already. However, for the first time I would like to say that this year looks quite good, I am cautiously optimistic but after many months I am using that term exports now.
Sonia: Just a larger, more qualitative trend of what is happening in the domestic market, now that this BS-IV confusion is out of the way, the transition has taken place, what do you see as the trend over the next few months given that the monsoon outlook is positive?
A: The monsoon outlook is certainly positive. The growth numbers are quite positive, GST should be a positive. So, there are many positives there and unfortunately this BS-III, BS-IV stuff has destabilised. We certainly hope that this year will be much better, maybe we should go back to the first half type of industry levels. The second half was a washout but quickly maybe from May onwards itself we should see overall things doing well.
Sonia: Overall things doing well means 3.5 lakh is a given for the overall sales for the next few months?
A: I should say certainly for the month of May we are looking at 3.5 lakh plus, that is domestic export, two wheeler, and three wheeler all put together. We hope it sustains also in June. June is a bit of a monsoon month and some markets may be disturbed but I think we should be there.