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Flurry of lockdowns interrupted recovery in July 2nd half: Bajaj Auto

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New Delhi, Aug 12 : The flurry of lockdowns across the country in many major cities and states interrupted the recovery in the second half of July, according to Rakesh Sharma, Executive Director, Bajaj Auto. “As a result the outcome in July was a bit lower than June retails,” he added.

In an interview with IANS, Sharma said the demand for motorcycles saw smart recovery to previous year’s levels by end June.

On the target for sales, he said “At the start of the quarter, our plan was to achieve cumulative sales of 1 million vehicles between domestic and export, including motorcycles and 3 wheelers. So far, we have achieved sales of just over 2,50,000 vehicles, including three-wheelers in July. Hence, barring unforeseen issues caused by Covid, we should be in line to achieve our Q2 objective of 1 million vehicles,” Sharma added.

Pent up demand is playing a major role in the recovery. “Certainly there is a strong element of pent up demand as there was a blank out of retails for almost 60 days. This has been a major factor in driving the rapid recovery to normalcy witnessed in June and early July,” he said.

He added that the experience of June and July suggests that demand can stage a recovery quite rapidly and is strongly as well as singularly dependent on the progression of COVID and the administration’s response to it. “Hence it is difficult to make forecasts. Our approach is to manage our business in shorter time horizons and recover faster than the industry,” Sharma said.

The three-wheeler segment is yet to pick up across domestic markets, he said. “With people working from home or avoiding the public transport, the demand for three wheeler transportation has taken a hit. This has severely impaired the earning power of 3 wheeler drivers and owners which weakens their ability to take loans or service them. Hence the recovery in 3 wheelers is very poor at only 40% levels,” he said.

Sharma said there is no evidence of downtrading. Bajaj Auto offers a range of motorcycles, starting from the affordable CT 100 and Platina to the KTM 390 series, priced above Rs 3 lakh. “We have not seen preference shifting towards CT100 kick-start, which is the most affordable motorcycle in the industry. On the contrary our new introduction – the Pulsar 125 has outperformed all brands despite being the most expensive 125 cc motorcycle in the market,” he added.

Here are the excerpts…

Q: How do you assess the month of July for Bajaj Auto and the two-wheeler industry?

A: The demand for motorcycles had started to show a smart recovery to previous year levels by end of June and this trend had continued in July. However, the flurry of lockdowns across the country in many major cities and states interrupted the recovery in the second half of July. As a result the outcome in July was a bit lower than June retails. Bajaj Auto’s performance was in line with the industry performance except for the mid 125 cc segment where we recorded handsome retails ahead of the industry and market share gains.

Q: How much capacity is Bajaj Auto operating at and what are the targets for the coming months?

A: At the start of the quarter, our plan was to achieve cumulative sales of 1 million vehicles between domestic and export, including motorcycles and 3W. So far, we have achieved sales of just over 2,50,000 vehicles, including 3W in July. Hence, barring unforeseen issues caused by COVID, we should be in line to achieve our Q2 objective of 1 MN vehicles. This volume is well within our manufacturing capacity.

Q: There is some evidence on the ground that the demand being seen is pent up demand of the last two or three months when the country was under lockdown. What is your view?

A: Certainly there is a strong element of pent up demand as there was a blank out of retails for almost 60 days. It is correct to assume that the decision making process of many customers was interrupted and with the roll back of the lockdowns , these customers are returning to the dealerships. This has been a major factor in driving the rapid recovery to normalcy witnessed in June and early July.

Q: What are the growth estimates for the company and industry for the coming months?

A: The experience of June and July suggests that demand can stage a recovery quite rapidly and is strongly as well as singularly dependent on the progression of Covid and the administration’s response to it. Hence it is difficult to make forecasts. Our approach is to manage our business in shorter time horizons and recover faster than the industry.

Q: How is Bajaj Auto adopting safety measures for the plants and retail dealerships?

A: We have undertaken abundant measures for safe operations of our facilities and to ensure that our employees also feel reassured about their well being. The measures include new work protocols, adequate social distancing, screening and monitoring, regular sanitisation, installation of safety features, training and communication. In doing this we have ensured compliance to Government standards. We have defined these protocols for our dealerships too and provided them with training and monitoring support under the Bajaj SECURE programme. The objective is also to ensure that the customers feel safe about visiting our dealerships.

Q: What is the outlook for three wheelers in the domestic market?

A: The three-wheeler segment is yet to pick up across domestic markets. With people working from home or avoiding the public transport, the demand for three wheeler transportation has taken a hit. This has severely impaired the earning power of 3 wheeler drivers and owners which weakens their ability to take loans or service them. Hence the recovery in 3 wheelers is very poor at only 40% levels. For the outlook to improve, there needs to be more passenger traffic and the finance companies need to recalibrate their risk and return assessment of the sector.

Q: How are the export markets performing for Bajaj Auto?

A: We are currently present in more than 70 countries, but we extensively study the pattern of demand and performance in around 50 countries. We see a mixed reaction on demand in these countries as compared to India. We believe that on an average the demand has reached 80% to 85% of the normal level. Our retail has reached 88% to 85% this July as compared to same period last year. In the case of exports, the inventory pipeline is generally higher due to transit inventory and that creates about a month’s lag between retail improvement and shipment improvement. We are hoping that its positive impact will be sensed from September at our end.

Q: What are the changing consumer trends being seen in these Covid times?

A: On the basis of June and July retails we have not observed any fundamental shifts in consumer preference and therefore in the market structure. Certainly in times of uncertainty the consumer does become more conscious of value and examines the proposition more robustly. However, if a proposition delivers substantive value, they are not shying away from paying more. It is being reflected in the market structure — in terms of the relative shares of each of the different segments of bikes — which has remained intact and there is no evidence of downtrading. Bajaj Auto offers a range of motorcycles, starting from the affordable CT 100 and Platina to the KTM 390 series, priced above Rs 3 lakh. We have not seen preference shifting towards CT100 kick-start, which is the most affordable motorcycle in the industry.

On the contrary our new introduction – the Pulsar 125 has outperformed all brands despite being the most expensive 125 cc motorcycle in the market.

Q: The rural markets seem to be outpacing the demand in the cities?

A: The rural markets were faster to recover but most urban and semi urban locations have also recovered apart from the very big cities like Delhi and Mumbai. Apart from these recovery has been quite secular and evenly spread.

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Tesla plans cheaper $25,000 electric car within 3 years: Elon Musk

Musk also announced that as well as purchasing batteries from Panasonic and LG Chem.

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Tesla CEO Elon Musk

San Francisco, Sep 23 : Elon Musk has said that Tesla plans to produce an electric car with a price tag of $25,000 within the next three years.

The aim, said Musk on Battery Day on Tuesday, is to make Tesla electric cars more affordable for the masses.

“That will basically be on-par or slightly better than a comparable gasoline car. This has always been our dream to make an affordable electric car,” he said during the virtual presentation.

The cheapest Tesla Model 3 that made its debut in February 2019 currently costs $35,000. it offers a 350-km range, a top speed of 210 km per hour and acceleration from 0-100 km per hour in 5.6 seconds.

“Tesla says has only been made possible by shifting sales to an online-only platform and by winding down physical outlets,” reports ZDNet.

Tesla is known for the Model Y, Model S, Model X, and Model 3 product lines.

“For a lot of people, they want to buy a Tesla, but they simply don’t have the money. We could make the car infinitely desirable, but if someone does not have the money, they won’t buy it,” Musk said.

The Tesla CEO also announced the development of a new battery cell and a reduction in cell cost per kilowatt-hour.

The main announcement was Tesla’s new larger cylindrical cells. It was claimed the new batteries will provide five times more energy, six times more power and 16 per cent greater driving range.

“But the technology announced is likely to take years to implement. Tesla’s approach includes integrating the battery so that it forms part of the structure of the vehicle, thereby reducing the effective weight of the battery,” reports the BBC.

Musk also announced that as well as purchasing batteries from Panasonic and LG Chem.

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BS-IV vehicles needed for public utility services & purchased up to March 31 be registered: SC

The issue of pollution from vehicles had cropped up before the apex court which is hearing a matter related to air pollution in the Delhi-national capital region (NCR).

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Toyota car sales Down

New Delhi, Sep 18 : The Supreme Court Friday said BS-IV vehicles, which were purchased on or before March 31 this year and are necessary for municipal corporation in Delhi to carry out essential public utility services, should be registered.

The apex court had in October 2018 said that no BS-IV compliant vehicle would be sold or registered in India from April 1, 2020.

In 2016, the Centre had also announced that India would skip the BS-V norms and adopt BS-VI by 2020.

BS emission norms are standards instituted by the government to regulate output of air pollutants from motor vehicles.

The matter came up for hearing before a bench headed by Chief Justice S A Bobde which dealt with applications related to registration of three types of vehicles — CNG , BS-IV and BS-VI compliant — for being used for essential public utility services.

“Insofar as CNG vehicles are concerned, there cannot be any valid rejection to the vehicles, as the emission from these vehicles is within the limits. Therefore, we direct that these vehicles may be registered,” said the bench, also comprising Justices A S Bopanna and V Ramasubramanian.

It noted that BS-VI norms came into force on April 1, 2020 and vehicles purchased up to March 31 this year were BS-IV compliant.

“Admittedly the emission from BS-VI compliant vehicles is within the norms and hence the vehicles purchased on or after April 1, 2020 and which are BS-VI compliant, should also liable to be registered,” it said.

The top court noted in its order that BS-IV compliant vehicles purchased up to March 31 this year must have been registered with the E-Vahan portal of the government before the cut-off date to establish the date of purchase.

“If the purchase had been made on or before March 31, 2020 and these vehicles are BS-IV compliant, such vehicles necessary for the municipal corporation to carry essential public utility services should also be registered. But such cases shall be scrutinized by the Environment Pollution Control Authority (EPCA),” the bench said.

The bench said to avoid repeated applications being filed before the court just for the purpose of getting registration, “we direct that the EPCA shall scrutiny the pending cases and submit a report to this court so that a common order could be passed without the necessity for several interlocutory applications.”

The issue of pollution from vehicles had cropped up before the apex court which is hearing a matter related to air pollution in the Delhi-national capital region (NCR).

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Elon Musk says Bill Gates has ‘no clue’ about electric trucks

Gates further said that “you’ll even be able to buy an all-electric pick-up truck soon thanks to legacy companies like GM and Ford and new carmakers like Rivian and Bollinger”.

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Tesla CEO Elon Musk

San Francisco, Sep 13 : Tesla and SpaceX CEO Elon Musk has hit back on tech billionaire Bill Gates who earlier cast doubt on his ability to develop electric vehicles for long-haul travel.

Reacting to a Twitter follower who asked Musk about his opinion on Gates’ comment on the viability of electric trucks, Musk replied: “He has no clue”.

Gates wrote in a blog post in late August that the problem with long-haul electric vehicles is that batteries are big and heavy.

“Even with big breakthroughs in battery technology, electric vehicles will probably never be a practical solution for things like 18-wheelers, cargo ships, and passenger jets. Electricity works when you need to cover short distances, but we need a different solution for heavy, long-haul vehicles,” Gates wrote.

He pointed to biofuels — rather than battery power — as a possible solution for commercial vehicles.

On the other hand, Musk is pretty excited about electric trucks and has reportedly directed Tesla to ramp up production of the Semi, a commercial vehicle with a range of up to 800 kms, for its upcoming debut.

Gates further said that “you’ll even be able to buy an all-electric pick-up truck soon thanks to legacy companies like GM and Ford and new carmakers like Rivian and Bollinger”.

Microsoft co-founder Gates told CNBC last month that “Elon’s positioning is to maintain a high level of outrageous comments”. He was referring to Musk’s comment on fake Covid-19 positive cases being reported, indirectly questioning the Covid testing process of the US government.

“He’s not much involved in vaccines. He makes a great electric car. And his rockets work well. So he’s allowed to say these things. I hope that he doesn’t confuse areas he’s not involved in too much,” Gates was quoted as saying.

Gates is the world’s second-richest person while Musk is now at fourth position.

The electric car maker Tesla is set to showcase “many exciting things” at its Battery Day on September 22, Musk has said.

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