IBEF: May 22, 2020
Bajaj Auto Ltd plans to enter Thailand with its premium motorcycle brands, including KTM, Husqvarna, Dominar and Pulsar NS series, by July 2020, said a senior company executive.
“Asean in an important geography for us wherein, apart from Philippines, we are not really present in the other countries. We are now focusing on Thailand, Indonesia, Vietnam, Mayanmar, Cambodia, Laos and others," Mr Rakesh Sharma, executive director at Bajaj Auto said.
"We plan to enter that market (Thailand) by July combining our forces with KTM. We are delayed due to the pandemic as earlier the plan was to enter that market in April," added Mr Sharma.
The company intends to enter the sports category with premium brands such as Dominar and the Pulsar NS range leading the charge, he added.
A new distributor for Thailand has been appointed by Bajaj Auto who will be responsible for setting up the local network and build the business for KTM as well as other brands.
“We have also identified some dealers and dealer appointment and setting up of the network is underway," said the senior company executive.
The company targets to strengthen its presence in the region, which is largely dominated by the Japanese automakers.
Bajaj Auto has local subsidiary PT. Bajaj Auto Indonesia in the country for local presence, which overlooks operations of the local distributor appointed for retail and distribution of KTM bikes.
“We are front-ending KTM and Husqvarna brands in Indonesia and will venture with premium Bajaj brands in a year from now," Mr Sharma said.
The company also has a strong presence in Philippines where it is present along with its partner Kawasaki. He added that Bajaj Auto entered Malaysia 18-20 months ago with the Pulsar series, which is doing well.
“On the three-wheeler business, we have created the market in Philippines, Cambodia and Mayanmar," Mr Sharma said.
Mr Aditya Jhawar, auto analyst at Investec Capital Services (India) Pvt Ltd said, some of the African countries are facing stress, which are key export markets for Bajaj Auto, and the risk of currency devaluation, the company is aiming on ramping up its presence in the other important regions.
“Asean countries are horizon-one markets for Bajaj Auto, which means they are being looked at with urgency," Mr Jhawar said.
The company’s domestic sales in FY20 was supported by a 10 per cent growth in motorcycle exports. Though, Bajaj Auto reported 8 per cent y-o-y decline in its consolidated revenues for the March quarter at Rs 6,816 crore (US$ 966.95 million). There was also a drop of 4 per cent y-o-y at Rs 1,354 crore (US$ 192.08 million) in consolidated net profit for the period.
For FY20, Bajaj Auto reported 6 per cent growth in its consolidated net profit at Rs 5,212 crore (US$ 739.40 million) despite a decline of 1.44 per cent in its revenue from operations, which stood at Rs 29,919 crore (US$ 4.24 billion).
The company exported 47 per cent of motorcycles and 45 per cent of three-wheelers produced in FY20.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.