Weak September Sales For Bajaj Auto | Supply-Chain Constraints Impacted Exports, Says Company

Good morning. Well, you know, we had a record month and a record quarter, but I must say we were planning for around 570,000 units this month, and I think your poll — I don't know how — but got it right almost to the last digit. But we ended up with about 40,000 units short, and that was entirely due to supply chain constraints — some unfortunate and some because of the solid ramp-up in demand we are seeing for our new products. So if I have to break down the 40,000 units, 20,000 of this shortfall was, you know, unfortunately in Chetak, where because of simply arrival of shipments of components we could not max the production. So instead of hitting, you know, more than 60,000 units, we were able to do only 42,000 units. So that's a big shortfall, though market-share-wise we have gained market share slightly. But now our channel stocks are very low, and there's a huge effort to retain the bookings and make sure that these bookings translate into retails in October. So that was 20,000 out of the 40,000.

Then we had about 15,000 units shortfall in exports, entirely because again we had logistic constraints this time — outbound logistics — because as you know, shipping opportunities are very difficult right now. And our operation of our size, where one container leaves our plants every 10 minutes, 24 by 7, any disruption has a very severe impact because lots of things can go wrong. But despite a huge effort, we did — we had to postpone into the next month. So exports was down about 15,000 units. And finally, you know, about 5 to 7,000 units we lost because the reception of some of our new models has been ahead of what we were anticipating. The old models — I had said it previously also last month — that September is a month of... August, September have been a month of points. There are points of inflection where we are phasing out our old models in the Pulsar range, in the Triumph and KTM ranges, and new models are setting in. Ten new models were launched in quarter two, and mostly they have met with very good reception. We are running at only nine, ten-day stocks for those models, particularly the Pulsar N160, the sporty ones. The 150cc-plus models have had a very good reception. We are furiously ramping up the capacity, and you know, this capacity relates to some of the electronic components, some of the defining features of these new models. Those models in the mix have shown very, very high levels of growth, and we just simply ran out of the components like TFTs, etc., and there was a shortfall in those. So all three put together, yes, it should have been a 570,000 month, closer to your estimates, which would have given us a 13% growth or so.

So, for example, the biggest one, which was Chetak, it got resolved in the last couple of days. We were all waiting for that, but it just sort of got pushed to the last couple of days. So obviously it is resolved. But so I think we should be — we've done 42,000 units of Chetak. Our capacity, depending on the mix, is 60, 65, and demand for Chetak is exceeding 65,000 units. But at least, you know, we will move up from 42,000 to hopefully 62,000 between September and October. So yes, we are looking at a better month than 570,000 in October. So October sales should be in excess of 5.7 lakh units.

Yeah. If I compare things in the immediate term, let's say last three months, there is no underlying weakness setting in. The weakness did set in in April, May, June, as you know, because the domestic industry was growing very fast till March, and then there was a step down from 20% to 12, 13%. So in the last few months, I won't say that there is an onset of any weakness in demand. In fact, I must also highlight three-wheelers. You know, we have had our highest ever production of three-wheelers in our history — 90,000 units. And while volumetrically, you know, it's a few thousand units which we fell short of, but it has an important impact on our bottom line. So even there, capacities are getting challenged. We are seeing huge demand in both EV auto and relatively good demand even in ICE auto. So I must say that three-wheelers is also part of this same supply-challenged situation right now.

So the export shortfall was not — I would not say that it was region-led. It was again, like I said, just shipping-opportunity-led. Even though we were scrambling to use different ports all around the country — we generally use JNPT, but we were scrambling to utilize the Gujarat ports, South India ports. So I would say it was not a demand-led, region-led thing. It was simply an issue of getting the right shipping opportunities and enough number of containers, because a lot of the containers have been actually sucked in for the China-Europe and the China-US trade.