In an interview with CNBC-TV18, Rajiv Bajaj, managing director of Bajaj Auto, spoke about the latest happenings in his company and the road ahead. Below is a verbatim transcript of the interview. Also watch the video.
Q: Can you start by giving us the March total numbers and a breakup?
A: March is actually been a good month for us — possibly our best March ever. We have done close to 300,000 motorcycles and 40,000 three-wheelers. So that’s a total of 340,000 vehicles. It includes an export of about 101,000 motorcycles and three wheelers. But I hasten to add one thing that as is the case with every March we have some vehicles, which are in transit, as far as exports are concerned, that is about 32,000. But otherwise we have had a wonderful March. This 32,000 would be accounted for in April.
Q: How did it breakup between Pulsar and Discover?
A: Pulsar is about 75,000 vehicles, while Discover is about 125,000-130,000 vehicles. Due of the technicality of vehicles in transit, I myself don’t have absolutely exact figures. The balance as usual is equally divided between the Platina, which we sell in the domestic market and Boxer for exports. That makes up 300,000 bikes and the balance 40,000 is three wheelers.
Q: You have a new launch as well. Before we talk about the details of that, on the basis of that new launch are you relooking your full year volume targets for this new financial year?
A: We have basically set ourselves a target of 20% growth for this year. That would mean that from about 3.85 million vehicles we have to move up to about 4.6 million vehicles, hopefully a little more, but at least 4.6 million. Somewhere between 4.1 and 4.2 million motorcycles is what we are targeting and about half a million three wheelers.
The growth in motorcycle volumes to 4.1 million or 4.2 million would be difficult or challenging let’s say because that needs to grow by 20% in a market that we anticipate will grow by perhaps between 12-14%. That’s where the Discover 125cc, we launched towards the end of the last financial year, would be valuable.
We are looking at initial sales level of 25,000 vehicles a month from that particular product and hopefully we can do some more.
Q: So in these 4.6-4.7 million units marked in for FY12, what is the breakup that you have done internally between the Discover, Pulsar and also the new 125 cc?
A: We expect to do over a million Pulsars. We are close to 900,000 this year so we would like to do over million that is both domestic plus exports and we are looking close to 1.7 million Discovers, which would be a growth of about 25% over what we have done last year
The growth in Discover, we hope, will be greater and we expect it will be greater than in Pulsar partly because we have started the year with the new Discover and also partly because as you perhaps know Pulsar is about 50% market share in the sport segment. So it’s not so easy to grow market share there whereas with the Discover we still have some headroom to grow market share.
So between the two that I refer as our bigger and sportier bikes we are hoping to do almost 3 million vehicles which should augur well for our EBITDA to keep it in the 20% or so space that we like to be in. the balance 1.1 million would be Platina and Boxer.
Q: So to get to 4.6-4.7 million you would imagine that at some point in the year you would be starting to clock more 4 lakh vehicles a month. When do you expect to hit that kind of run rate?
A: What might happen is we might get lucky and do close to that in April and May itself because, as I mentioned earlier, technically 32,000 vehicles will be accounted for in April. We are looking at April total sale of about 3.8 lakh vehicles and May is usually better than April.
I would like to think sometime in the Q1 we can at least touch that figure of 400,000 vehicles but surely as we are halfway through the year we should be closer to it because we will launch the Boxer sometime in August again into the commuter space — not in the low price space — but in the space of typical large selling commuter deluxe motorcycles.
We are hopeful that since this motorcycle also sort of creates its own category we are looking at it contributing another 200,000-300,000 vehicles for Bajaj next year as well. So once that is in we should be firmly in the region of 400,000 a month.
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