With the demand for commercial vehicles (CV) in domestic and international markets exceeding supply, Pune-based Bajaj Auto said its export orders are temporarily deferred and capacity is being diverted to the domestic market.
The CV segment being cyclic is seeing some green off-shoots, indicating some kind of revival in the light commercial vehicle (LCV) category, though the medium and heavy commercial vehicles (M&HCVs), which are an indicator of the performance of the economy, remain in the red.
According to the data by auto industry lobbying body SIAM, while the overall CV segment grew 5.96% during April-September period of the current year as compared to the same period last year, medium and heavy commercial vehicles declined 6.56%. LCVs grew 14.76% in during the same period.
As per the latest quarterly results released by Bajaj Auto on Tuesday, the company clocked 84,938 units of CV sales during Q2 of this fiscal as compared to 52,347 units in the preceding quarter, which translates into a whopping 62% growth in the domestic market.
In the export market, the company sold 67,851 units during Q2 as compared to 60,373 units in Q1, a 12% growth. The company said it has recorded its highest-ever quarterly sales of CVs in the domestic market at 84,938 units.
Kevin D’sa, president (finance), Bajaj Auto said, “With demand for commercial vehicles in domestic and international markets over-stripping its supply, export orders are temporarily deferred and capacity is diverted to the domestic market. The outlook for commercial vehicles remains very positive and the company is likely to cross a record three lakh units in FY18, well ahead of its annual target.”
Meanwhile, in a related development, the company executives claim that though there has been discontinuation of permits in the State of Maharashtra, new permits released in Delhi and replacement of 2-stroke three-wheelers with 4-stroke three-wheelers for the city of Bengaluru, is expected to help the company leverage its leadership position.
Relating to developments in the international markets, Bajaj Auto said that the new/nascent markets now contribute around 16% of the total volumes as against 10% in FY17 and 6% in FY16. Also, with stability returning in Nigeria, the company reaped the benefits of its support to the network as motorcycle volumes have steadily improved from 8,000 units in April 2017 to 26,000 units in August 2017 and 23,000 units in September 2017.
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