Bajaj Auto managing director Rajiv Bajaj announced that the Indian brand will be bringing the Husqvarna brand to India next year (FY2019-20) at an annual general meeting (AGM) held in Pune today.
In addition to bringing the Austrian bike maker to the country (the first launches will be the Vitpilen 401 and Svartpilen 401), the head of Bajaj also said that the brand has plans to launch electric vehicles (EVs) including electric two-wheelers before the implementation of the new BS-VI norms, scheduled to being on April 1, 2020.
As part of the company’s aggressive go-forward strategy, which includes a 50 percent growth in the domestic motorcycle market in H2 FY2019, he also hinted the company would announce new developments under its alliance with the UK’s Triumph Motorcycles in a few weeks from now.
According to some market analysts, Bajaj Auto has had a good run in the domestic and in export markets in Q1 FY2019, which has provided a cushion to the company to offer substantial discounts on its motorcycle offerings to boost sales (and its share) in the domestic market.
“Rajiv Bajaj’s statements at today’s AGM clearly suggest that the company is gearing up to further add more market share in the coming months. They want to aggressively focus on the commuter segment and are willing to grow their market share via new products, new brands, new marketing campaigns and discounts. This would obviously put the company’s competitors under severe price pressure as the margins on the entry-level motorcycles are very modest,” revealed a market analyst who tracks Bajaj Auto regularly and was present at the company AGM today in Pune.
Bajaj Auto on a roll
Bajaj released its first quarterly results today. The Q1 FY2019 results marked its highest ever standalone volumes at 1,226,641 units (up 38 percent YoY), highest ever turnover of Rs 7,824 crore (up 33 percent YoY) and highest ever profit before tax (PBT) of Rs 1,616 crore (up 25 percent YoY).
In Q1 FY2019, while Bajaj Auto’s domestic motorcycle sales stand at 594,234 units (up 39 percent YoY), its motorcycle shipments overseas have fetched 435,730 units (up 25 percent YoY). Similarly, on the commercial vehicle (three-wheelers) front, its domestic sales stand at 94,431 units (up 80 percent YoY) and its exports are at 102,246 units (up 69 percent YoY). All in all, the company’s total sales in Q1 FY2019 have grown by 44 percent YoY in the domestic market and 31 percent YoY in the export markets.
“The company, which has sold more than a million motorcycles already (in Q1 FY19), has given a guidance of (is targeting total sales) of about 4.8 million units in this fiscal (including exports),” says a market analyst on the condition of anonymity.
In the official communication released earlier today, the company has said that its share in the domestic motorcycle market has increased to 16.3 percent in Q1 FY19 from 14 percent in Q1 FY18. The CT100 and the Platina brand of motorcycles have fetched sales of more than 190,000 units (up about 76 percent YoY) and 104,000 units (up about 35 percent YoY) respectively during the Q1 of this fiscal. The company has reportedly registered a substantial growth of 74 percent YoY in the entry-level segment (100cc-125cc commuters) in the Q1 this fiscal.
Bajaj Auto’s largest selling motorcycle brand – Pulsar – has also grown impressively during the period. According to the company, Pulsar, along with the Avenger brand, has sold more than 223,000 units thereby recording a growth of 47 percent YoY. Its share in this segment (150cc – 220cc) stood around 38 percent in Q1 FY2019.
On the export front, the company has recorded its highest ever quarterly exports of about 538,000 units in Q1 FY2019. This again marks a good growth of 31 percent YoY for the company. It says that the export growth can be attributed to growth in demand for bikes and three-wheelers across the new and matured markets.
According to the company document, its cash surplus and cash equivalents stood at Rs 16,889 crore as on 30 June 2018. This was Rs 15,542 crore on 31 March 2018.