Maharashtra, Delhi drive Bajaj Auto’s three-wheeler sales growth

Bajaj Auto’s three-wheelers are on a fast track. The end of the permit raj for autorickshaws in Maharashtra has pushed the company’s three-wheeler sales to record highs in FY18 and this good run is expected to continue in FY19 too. Bajaj Auto has emerged as a major beneficiary of the end of the permit system in Maharashtra and issue of new permits in Delhi. There has been a recovery in three-wheeler exports as well, and the company is set to exceed its annual sales targets this year. Bajaj Auto enjoys 62% market share in this market and is making the most of the opportunity. The company has seen its commercial vehicle or three-wheeler sales go up in the domestic market by 154% to 39,082 units in January and 187% during December 2017 with sales of 36,579 units. For the first time, quarterly volumes in the domestic market exceeded one lakh units and grew by 105% to 1.10 lakh units during Q3FY18.

Total Q3 sales stood at 1.82 lakh units, the highest-ever for any quarter. For the April 2017 to January 2018 period, three-wheeler sales from the domestic and export markets jumped 32% to 5.12 lakh units. Domestic sales were at 2.86 lakh units and exports at 2.26 lakh units. Kevin D’sa, president, finance, Bajaj Auto, said at an investor call on Monday that the company had a good run this year because of Maharashtra doing away with permits and Delhi issuing new permits. Sales many not be as high as it is in the current quarter, but the company sees growth in the next year or two, D’sa said.

Meanwhile, Bajaj Auto will be using the excess cash for acquiring brands and growing its two- and three-wheeler business. Till then, the excess cash will remain with the company, D’sa said. There will be no buyback or special dividend, he said. As on December 31, 2017 Bajaj Auto was sitting on surplus cash and cash equivalent of Rs 13,554 crore.

Bajaj Auto Limited