InvestorQ : Can you tell me about the stellar numbers presented by Bajaj Auto in the December month?
NISHA Nayak made post

Can you tell me about the stellar numbers presented by Bajaj Auto in the December month?

Priyanka N answered.
6 months ago

The stellar numbers of Bajaj Auto for the month of December can be largely attributed to exports but we will come back to that later. For starters, suffice to say that Bajaj Auto reported an 11% spike in YOY sales for the month of Dec-20 at 372,532 units. This is a commendable performance in an otherwise tough month.

If you compare Bajaj Auto with other two wheeler manufacturers in India like Hero Moto, Honda or TVS Motors, the big difference in the Bajaj Auto business model has been its consistent focus on exports of two-wheelers. In fact, the export market accounts for 63% of the total sales of Bajaj in December with domestic accounting for just 37%.

However, now the export push of Bajaj Auto really appears to be paying off. Consider the numbers for the month of Dec-20. Bajaj Auto reported 9% lower domestic sales of two wheelers at 139,606 units. How come the overall growth in numbers? The domestic fall in sales was more than compensated by the 27% spurt in export sales at 232,926 units.

When Bajaj started its export push many years back, most analysts had dismissed the move as another short sighted initiative. However, it is to the credit of Rajiv Bajaj that he not only built the motorcycle franchise for Bajaj but also entirely captured the export market for two-wheelers. For Bajaj Auto, global sales have really come as a saving grace in a tough month.

One only needs to look at the dichotomy. In terms of the overcrowded domestic market, Bajaj ranks fourth in two-wheelers behind Hero Motocorp, Honda and TVS Motors. However, this is more than compensated by its strong export franchise at 63% of total sales with dominant market share in Asia, Africa and Latin America.