Saw mkt share jump to 20% in Apr vs 17% in Dec: Bajaj Auto

Bajaj Auto 's April performance year-on-year remained flat, with the company reporting total sales at 3.3 lakh units, a marginal 4 percent fall when compared to the year-ago period.

Rajiv Bajaj, MD, Bajaj Auto spoke about the company's performance for the month of April and said: "The positive takeout from our point of view is that the month of March was the first month in almost all of last year when from being in the deficit of 10-15 percent Y-o-Y thanks to the launch of a New Discover, we have caught up on the Y-o-Y basis."

Also Read: Maruti, Toyota, M&M sales drop in April; Hyundai, Honda up

He said in April despite a few hiccups in the exports market, Bajaj Auto managed to stay on par with the previous year.

The company also saw its market share improve to 20 percent in April versus 17 percent in December.

Below is the verbatim transcript of Rajiv Bajaj's interview with Latha Venkatesh and Sonia Shenoy on CNBC-TV18.

Latha: The numbers have just come in, I don't have the fineprint. Can you take us through the performance this time?

A: Essentially for the month of April on a year-on-year (Y-o-Y) basis, the performance is approximately flat. The motorcycle sales are quite literally flat about 300,000 versus 300,000 lakh shares. Commercial vehicles primarily because of exports are down about 25 percent, this is mainly due to Egypt. In the domestic market, despite the difficult condition we have done well because three-wheeler sales are again flat. They are at about 14,000 this April versus 14,000 last April. I think the positive takeout from our point of view is two-fold. One is that the month of March was the first month in almost all of the last year when from being in the deficit of 10-15 percent Y-o-Y thanks to the launch of a New Discover, we have caught up on the Y-o-Y basis. So in that sense, I am pleased that in the month of April despite some hiccups in the export markets, we stay on par with the last year.

Secondly, the total sales for April, which were at about 330,000 - if you just extrapolate that simplistically for a year, it would be a figure over 4 million which is a higher runrate than what we recorded for all of the last year. So I think there is a slight positive overall.

Latha: Arithmetically and optically April looks better than March, 3.3 versus 3.04 something are the numbers that your company is flashing. Are you not getting that sense from your field force itself that April is perhaps better than March and therefore things are on the mend, what are the intangibles you are picking up from your field force?

A: I think what is most positive at this time is the good response we have got for the New Discover particularly for the Discover 125 which is the center of the brand and for which the communication started only about 10-12 days ago. So I think that is more significant right now because although I don't have the exact numbers right now, I think the Platina last month in the domestic market was close to 50,000 and while I don't have the split of the Pulsar platform between domestic and exports is about 85,000, so I would just say domestic is about 70,000. So those two brands continue to do very well. As we have been saying for the last few months, the New Discover will start delivering the number and I think that process has begun and we should see a build up through May-June and for the rest of the year.

Sonia: You were telling us about the problems that you are facing in the Egyptian market, how grave are they and what could that result into in terms of your run rate in exports as well as in three-wheelers?

A: I think we are about to turn the corner on that. This being a government related matter, it is hard to say with absolute certainty but we are missing out on about 7,000 three-wheelers a month because of the ban that is there but I am told that in the next 15 days, if not earlier, we should hear of a decision to reverse that. I am given to believe that effect has perhaps been internally already taken, it is a matter of formally putting it out. If that is true then it would mean that from June onwards three-wheeler sales would be pretty close to normal in the export market.

Latha: So what is your game plan as far as the market share is concerned, the last time you has spoken with us, you had indicated that you plan to claw back to that earlier 24 percent level soon but in terms of the next three-six months, what kind of trajectory can we expect from the current 20 percent mark?

A: You are referring to the domestic motorcycle market share and I would say that given how things have panned out in April, we are on course to do that. We have from a low of about 17 percent in December to come back to about 19 percent in March and since I don't have competition - all the data for the competition right now I cannot give you a figure but I would suspect that it is around 19-20 percent for April also. Some of the numbers I have do bear out what I have been saying for the last few months in terms of some competitors billing heavily to dealers and retail sales not matching that and instead of my talking about it, you can find out about it.

Latha: You can at least talk to us about the labour issue. If you can update, they deferred the strike saying that they expect the management to respond to their move, what is the current situation?

A: It is best to say it as simply that we are now dealing with an extremely minority union, the union that seems to have lost the credibility of the very vast majority by that I mean that out of 850 of the permanent employees, I think less than 50 are supportive of them now and if you look at what they are asking for this time it is just a last minute attempt to try and make some kind of an impact but unfortunately, doing it the same old way and I don't think that is going to work. So sensing that we have decided to take a very firm stand now. that we will be very firm with any kind of misdemeanor on the premises in respect of safety, production etc and I think it is at least partly owing to the very tough stand that we explicitly took that the Union decided to postpone by two weeks, the work stoppage and whatever they might say, we know that the reason is quite different which is that over 800 people wish to accept the management's offer of a wage hike of Rs 10,000 a month, which the union were to endorse that then they could rightfully be asked by many that they didn't add any value to this. So what they are hopeful is going to happen, I think it is today or tomorrow that this will come up for a hearing in the court. It is expected that the court will endorse what the management has offered and this will then permit the union a face-saving because they can go back and say the court has now passed a judgement, let us go with it. So I think this is just politics, which is the flavour of the season.

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