homeauto NewsChip shortage hitting sports segment supply; entry level two wheelers underperforming: Bajaj Auto
auto | Dec 1, 2021 11:52 AM IST

Chip shortage hitting sports segment supply; entry-level two-wheelers underperforming: Bajaj Auto

Mini

Bajaj Auto just reported its numbers, total sales are down 10 percent and domestic sales are under further pressure coming in at the lowest level since May 2021.In an interview with CNBC-TV18, Rakesh Sharma, ED of Bajaj Auto, shared more details about the November sales numbers and the reason behind the drop.

The auto sales figure for the month of November is trickling in. Bajaj Auto just reported its numbers, total sales are down 10 percent and domestic sales are under further pressure coming in at the lowest level since May 2021.

Recommended Articles

View All

In an interview with CNBC-TV18, Rakesh Sharma, ED of Bajaj Auto, shared more details about the November sales numbers and the reason behind the drop.
Sharma said, “The little surge we saw in July- August period, after that the industry has been underperforming. Particularly if you compare, from the previous high of FY 2018-2019, the industry is about 30 percent down. A large part of this is because of the entry level segments underperforming a lot.”
“In recent times, ironically the segment where demand is a little bit more vibrant is the sports segment above 150 CC - there we have faced supply chain disruptions caused by chip shortage. So when demand is sort of recovering, you have got a supply chain issue and where you have got no supply chain issue, there is a demand problem,” he mentioned.
Export numbers look flat, but pretty stable for the two-wheeler maker.
Sharma said, “Sequentially, the export numbers are looking pretty good, despite again, certain shortfalls in the sports segment caused by supply chain issues. Compared to last year, yes, they are a bit flat. But at 220,000, we are running at a very nice rate. We will be almost 2.4 million and about $2.3 billion in this financial year, which will be an all-time record both in value and volume for us.”
On overall recovery, he said, “I think there is an overall recovery in the economy but it has to trickle down into the segment where the entry level two-wheelers reside, and a direct intervention, whether it is in terms of supporting those customers to have more money in their pocket or giving relief on taxation, will help."
"As you know that the two-wheeler industry, over the last three to four years, has been facing a lot of regulatory and other cost increases. So some relief on that side would certainly do something to kick start the recovery in the bottom half of the industry,” mentioned Sharma.
He added, “If demand has to come back to the 2018-2019 levels, then I think there has to be some kind of an intervention done, otherwise it will come back but on the basis of a trickledown effect in the economy and that may take longer to unfold and play out.”
On-demand outlook, Sharma said, “December will continue in the same manner and a gentle recovery may be seen going forward. A kind of a gentle trajectory should continue in the domestic business.”
On impact of electric vehicle (EV) sales in October and November, he said, “As far as EVs are concerned, it is an important development but as of October or November, I would say the impact is still very, very small; the impact may be higher in certain pockets in one or two midsized metros.”
For full management commentary, watch the video.
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!

Top Budget Opinions

    Most Read

    Market Movers

    View All
    Top GainersTop Losers
    CurrencyCommodities
    CompanyPriceChng%Chng