Bajaj sailed past Hero MotoCorp, the company with the biggest turnover for more than 10 years
Bajaj Auto clocked revenues of nearly Rs 30,000 crore during FY20 to become the highest income generator in the two- and three-wheeler categories. Bajaj sailed past Hero MotoCorp which had held onto the position of being the company with the biggest turnover for more than 10 years.
Bajaj’s fall of 1.4 percent in the revenue from operations to Rs 29,919 crore during FY20, as compared to FY19, was lower than Hero’s which reported a drop of 14 percent in revenue from operations to Rs 28,836 crore in FY20 compared to FY19.
In addition to sales from motorcycles Bajaj Auto’s turnover also includes revenues from the three-wheeler business. Hero MotoCorp, however, does not make three-wheelers but it sells scooters which Bajaj Auto stopped making a decade ago.
Bajaj Auto saw 8 percent decline in sales volumes during FY20 to 4.61 million units while Hero MotoCorp reported 18 percent decline in volumes to 6.39 million during the same year, as per data shared by both the companies.
Since the majority of Hero’s volumes comes from the domestic market it maintained its position as the market leader in the two-wheeler space in India during FY20. Bajaj finished fourth in the domestic two-wheeler market one-third of which is controlled by scooters. Honda Motorcycle and Scooter India and TVS Motor Company are the second and third largest two-wheeler sellers, respectively.
Despite a volume difference of more than 1.78 million units Bajaj Auto was able to clock higher revenue than Hero MotoCorp. A major reason behind this is the export play of Bajaj. The Pune-based company exported 47 percent of its production last year which was much higher than 41 percent clocked in FY19.
The 79 export markets of Bajaj Auto including markets in Africa, Latin America, South Asia and Middle East report higher revenues and richer margins than in India. Since December 2019 Bajaj’s exports have been higher than domestic sales. Bajaj also makes KTM and Husqvarna branded bikes for India and export markets.
In comparison, Hero MotoCorp exported less than 3 percent of its production during 2019, lower than earlier years. Hero is present in 40 countries including Sri Lanka, Bangladesh, Nepal, Nigeria, Columbia. As much as 75 percent of Hero’s sales come from the low priced models such as Splendor, HF Dawn and Passion.
Rakesh Sharma, Executive Director, Bajaj Auto, said, “While FY 2019-20 was a challenging year, we note that not only have we emerged as the overall leader in our segment, we have also put in place several initiatives that will build momentum. Despite the uncertainties surrounding the immediate future, we are confident that our strategic path will serve our ambitions of global leadership and business success.”Live Webinar: Moneycontrol Rule the New Normal, powered by Lenovo. Click Here.
