Bajaj Auto 's depressing run of monthly sales continued in January with total sales declining 9 percent year-on-year to 2.88 lakh units.
Volume sales in its core motorcycle business declined 12 percent to 2.47 lakh units. Motorcycle sales had fallen 6 percent year-on-year in December too. Bajaj Auto has ceded market share in motorcycles to rivals over the last many months, and efforts to reverse the trend through product upgrades has yielded little result so far.
The company's Managing Director Rajiv Bajaj said sales were impacted by the hike in excise duty, and also that the domestic market for motorcycle remained sluggish.
The company's exports in January grew a modest 4 percent to 1.43 lakh units, indicating pressure in the exports market.
Oil producing Nigeria, the biggest foreign market for Bajaj Auto, is going through an economic turmoil following a steep fall in crude prices. Bajaj said exports would pick up to around 1.65 lakh units after the elections in Nigeria next month. Retail sales in Nigeria are expected to fall around 40 percent till the elections, he said.
Bajaj said the company was seeing a bit of a hiccup in Egypt due to forex volatility. In Sri Lanka, another key market, the recent change of government has led to a freeze in new export orders, he said.
He said the company had seen good success in Mexico and Argentina recently, and was planning to enter 29 new markets by end of next March.
The only consolation in January numbers was a 14 percent increase in three-wheeler sales to 41,791 units. But given that three-wheeler sales accounts for barely 15 percent of total sales, this growth does not change the big picture for Bajaj Auto.
Below is the transcript of Rajiv Bajaj's interview with Latha Venkatesh and Sonia Shenoy on CNBC-TV18.
Latha: What would you blame this onto, do you think the industry is not picking up, do you think you are losing market share; this is a fairly big year-on-year (YoY) fall?
A: Let me try and break it down for you and then the numbers will speak for themselves. As you correctly pointed out overall YoY sales are down about 9 percent; approximately 3,20,000 to 2,90,000. If we break that down by product we would see that three wheelers i.e. commercial vehicles have grown quite nicely about 14 percent from about 36,000 to 41,000. Within that if we look at markets as in domestic and exports, this time it is the domestic market that has performed nicely up about 35 percent from 12, 500 to 17,000 whereas exports have been flat at about 24,000.
If we come to motorcycles, you are quite right to point out that there continues to be a YoY negative over there. Total motorcycle sales are just little shy of 2,50,000; roughly about a 1,30,000 domestic which is down continues to be down YoY. Exports are marginally up this time from about 1,13,000 to 1,18,000.
So, coming back to your question what are the significant issues, for us there are two. One, domestic industry continues to be very sluggish and in my view we have to get past this Budget and we have to see whether sentiments revive, whether people make up their minds to come out and buy because the excise hike on January 1 has been a bit of a issue. For the industry 4-5 percent price increase is not small; it takes time to absorb that.
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