Bajaj Auto Ltd—one of the country's leading a motorcycle manufacturers—on Friday reported 23.5% month-on-month increase in wholesale dispatches of its motorcycles in March, compared to the preceding month as the company increased vehicle stocks at dealerships before the start of the marriage and harvest season.
The Pune based company reported wholesale of 1,46,876 units in February. On a corresponding basis, factory dispatches jumped substantially from March last year when the company had sold just 98,412 vehicles as production was halted due to the lockdown measures imposed to contain the outbreak of Covid -19 pandemic.
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Automakers had to close down their respective factories in the second half of March 2020, as the Union government imposed a stringent lockdown from 18 March 2020. Subsequently, operations remained suspended till the first week of May. It took automakers another two months to come back to normal production schedule.
The growth in wholesale though comes on the back of low base effect and continued improvement in economic activity. Dispatches of motorcycles and scooters have been subdued in the last few months as demand for entry level motorcycles has slowed down after resumption of public transport in rural areas.
Bajaj Auto’s export volumes also declined by 8.9% to 1,48,740 units during the month. In the corresponding period, exports stood at 1,12,564 units.
Overall, the company witnessed 13% decline in sales in FY21 to 18.09 lakh units while exports also dropped by 4% to 17.96 lakh units due to Covid-19 related disruptions.
On Monday, most automakers reported decent increase in volumes on a sequential basis. Hero Moto Corp—the country's largest two-wheeler manufacturer—witnessed 12.3% to 5,44,340 units while Chennai based TVS Motor Co. reported a 3.5% jump in volumes.
Premium Premium Due to contraction in demand, two-wheeler manufacturers like Hero MotoCorp, Bajaj Auto and others are offering sharp discounts to liquidate vehicle stocks at dealerships.
“Slowness in demand was further impacted by fuel price inflation. We expect some recovery in demand in Apr’21 due to expected cash flow from the sale of rabi crop and beginning of the marriage season. OEMs like Bajaj Auto and Hero Moto Corp. Ltd are offering discounts to push sales. Dealers are holding 1-1.5 months of inventory," said analysts of Motilal Oswal Institional Equities in a report.
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