The June quarter gain during which the Rajiv Bajaj-led company outgrew the broader motorcycle market follows a year disrupted by the transition from BS III to BSIV emission norms and implementation of goods and services tax. Its sales in three periods rose 39 per cent against motorcycle market's 19 per cent.
Though Bajaj is yet to get to the stated 24 per cent market share target, the June quarter gains puts the second largest motorcycle maker on a strong growth trajectory and helps it maintain the lead with its nearest rival Honda Motorcycle.
Some of the volume and market share gains are also because of a price reduction the Bajaj Auto took in the March quarter for some of the select variants of its entry level model CT 100 to undercut its rivals. Led by the entry level bikes, which advanced 18 per cent owing to the forecast of a good monsoon, the growth in the motorcycle market has been a broad-based one, said Vas.
The rural demand has been strong on the back of a pent-up demand and forecast of a good monsoon, said Bajaj's Vas, The 150cc to 200cc bikes are being driven by a sustainable urban, rural demand, he added.
“Historically, the first quarter has always been good for Bajaj Auto,” said an analyst as the firm sells a lot of Platinas and CT 100s in the north where demand is strong during the marriage season.
Bajaj has been a bigger beneficiary of the season as its entry level models are priced at a 20 per cent discount to the Hero Splendor. Secondly, the price cut in the entry level models taken by the company in March has also boded well and helped in the volume gain, he said.
The price reduction is unlikely to have an adverse impact on the firm’s margins. The depreciating rupee will bump up its export realisation. Year-to-date, the Indian rupee has depreciated 6.85 per cent to Rs 68.57 against the dollar. With exports accounting for 40 per cent of Bajaj's revenue, a depreciating rupee augurs well for the company.
Analysts are optimistic of the road ahead. “Going forward, new launches and upgrades may further lift up the domestic performance of motor cycles," wrote Ashwin Patil, analyst at LKP Securities in a research report.