Bajaj Auto continues to underperform in Africa as inflation dents demand

Several countries across Africa like Nigeria underperformed for Bajaj Auto in the April-June quarter of FY25, Rakesh Sharma, Executive Director, Bajaj Auto told reporters in a post-earnings call on Tuesday.

“The number of countries which remain in test condition is also clearly reducing largely in Africa... We have seen currency stabilisation for the last few weeks in Nigeria. The substantial devaluation and inflation have seriously dented demand. Our benchmark motorcycle sales in Nigeria of 50,000 per month has dropped down to under 5,000,” Sharma said.

According to Sharma, while the company’s exports dropped by 40% in Africa, they were up by 20% in the Middle East and North Africa, as well as by 70% in Asia led by Philippines and Nepal.

“In the recovering and growing market, we are significantly outperforming the industry and gaining share. The new plant in Brazil commenced production in June. It was a single ship capacity of 20,000 units per annum. But that is scalable to 50,000 units per annum. This will make a quantum change to our capability to introduce new models and widen distribution. traction for our Dominar brand has been excellent. And in the medium term, we expect this to be amongst the top three international markets,” said Sharma.

Notably, the company reported a 19.44% increase in its standalone net profit to ₹1,988.34 crore, as against ₹1,664.77 crore in the same period last year. The revenue from operations of the Pulsar manufacturer stood at ₹11,928.02 crore, during the quarter under review, up 15.70% as against ₹10,309.77 crore in the corresponding period of the last year. Of this, the company’s electric vehicle portfolio contributed 14% to the revenue.

Segment-wise, the above 125cc segment accounted for 51% of the company’s revenue. The company’s market share in the above 125 cc segment grew to 25%, whereas in the 100 cc to 125 cc segment, the company’s market share stood at 15%.

“Together the newly launched Pulsar N and NS series and the higher end pulsars account for 70% of our portfolio. This personal portfolio gives us a great thing both for growth through increasing market share as well as by expanding the sport segment itself,” said Sharma.

Notably, the company’s electric scooter Chetak 2901, which is priced at ₹96,000, retained the third position in the below ₹1 lakh segment. Through its electric scooter, the company plans to grab a larger pie in the below ₹1 lakh market which is dominated by the likes of Ola S1X, by expanding its Chetak stores to 500 units by the July-end and 1,000 by September.

Sharma observed that the competition in the electric two-wheeler space is going to heat up going forward. At present, Bhavish Aggarwal-led Ola Electric, which is preparing to launch a ₹5,500 crore IPO (initial public offering), leads the electric two-wheeler segment with 51% market share. This is followed by TVS Motors with 17.5% market share, Bajaj Auto with 13% market share and Ather Energy with 11%. Going forward, Sharma opined, as Bajaj Auto and other OEMs expand their distribution network, the market leader will feel the heat.

Meanwhile, in the three-wheeler segment, the company’s market share increased to 26% in Q1 of FY25.