Sector Outlook 2022: Bajaj Auto's electric three-wheeler will be launched by the middle of next year: Rakesh Sharma, ED

Rakesh Sharma, Executive Director, Bajaj Auto Ltd talks about what could be the growth drivers in 2022, demand situation, revenue growth strategy, electric vehicles including Chetak e-scooter and e-three-wheeler plans among others during an interview with Zee business' Swati Khandelwal. Edited Excerpts: 

Q: What would be the important growth drivers for the auto sector in 2022? After having seen a kind of volatile years for two years, there was a demand recovery, which was a pleasant surprise. Do you think that it will continue in the future as well?

A: Providing a broad-brushed general statement for 2022 is difficult, even if I exclude the possibility of a third wave of COVID because many factors have come in it. In the last three to four months, you must have seen that there is a lot of uncertainty in the supply chain and whether we will get the chips or not. The sports bikes and high CC bikes like 150 CC and above bikes are affected a lot. Secondly, the demand has been quite uncertain for the entry-level as there has been a lot of damage to the economic well-being of these people due to the COVID and their savings have been reduced. 

Now, normalcy is coming and we are seeing that the upper half of the pyramid have started spending and the economic engine wheel is running again. But, still, we have to see that by when its trickledown impact will reach the entry-level customer. So, the period by when the trickledown effect does not awake the entry-level customer till than the entry-level bikes, which has around 50% contribution, we will see the demand as weak. So, there is a demand weakness at the lower level while there is a demand at the top but there is a supply chain uncertainty for the chips and we have seen some normalcy in the 125 CC category.

Q: What will be your company's strategy for revenue growth in 2022 keeping the margin intact in uncertainty where Omicron cases are rising across the world?

A: Our strategy will be the same on which we have been focusing for the last two years and is to attract more to strong customers in the 125 CC plus segments by offering new products and new propositions. In the kick-start, we are attracting the kick-start customers towards the electric start and 100 CC customers towards the 125 CC segment. The strong customers are on the lookout to upgrade. Similarly, we have a lot of focus on the sports segment. In 2022, if the supply chain situation settles in the next 3-4 months, we will bring several new products in the sports section from 150 CC to 250 CC to 400 CC. We have already launched two new products of 250 CC in the market in December and we will build on these. Apart from this, our exports stand above 50% and there is a lot of normalcy in exports. Hopefully, there will be some control in the ASEAN region, which is quite important for us, like the Philippines among others and demand, will rise there and we will have a great focus on it. This year will be our record-breaking year in the sports segment and the export is likely to stand around $2.4 billion. The previous high was 2.2 million vehicles and this year we will try to touch a high of 2.5 million units by March-end and then we will build on it in 2022. Thirdly, the three-wheelers business is coming back a lot and normalcy are being attained. So, the three-wheelers business, which declined a lot is returning gradually. However, in this period, we have gained a leadership position in every segment.

Q: What are your plans on electric vehicles and will we get a chance to see an electric three-wheeler from Bajaj? You have already introduced Chetak e-scooter in some parts and by when it will be made pan-India and what kind of response you are getting on it and how long is the waiting period on it? 

A: Now, we are more focused on electric vehicles. If I will provide you with a period of next two to three years then the majority of new products whether it is three-wheelers or two-wheelers, they will come under the umbrella of electric. So, we have a great focus on it. There is also a supply-chain issue in it, be it cells or semiconductor chips. Supply-chain has not opened completely in this too. In the case of Chetak, we are facing an issue that Chetak has got a good response but we are not able to supply it due to which we are not increasing its spread. This is why, we are present only in nine cities, however, we were trying to reach into 30 cities this year but we feel that we will not be able to do that much by March 2022 as there is not that much availability and we are having a wait-lost for 3-4 months due to which we do not want to take more bookings as the customer will get frustrated a bit due to it. So, I wanted to say that if the situation settles in the next 2-3 months then we will try to take Chetak to the top 100 towns in 2022. Secondly, we will also try to add new products to the brand portfolio of Chetak. Thirdly, our electric three-wheelers will be launched by the middle of the next year.