Bajaj aims for aggressive e-2W growth

Pune-based two-wheeler maker Bajaj Auto is set to expand its e-scooter brand Chetak with a number of new launches across price segments and user groups, as supply chains streamline and its research and development efforts on lowering the cost of its products bear fruit, a senior executive said on Wednesday after the company reported its December quarter results.

The company’s net profit for the third quarter has exceeded expectations, primarily on the back of robust domestic sales, and higher margins on motorcycle and scooters, to offset the effects of declining exports.

The company’s standalone net profit for the quarter stood at 1,491 crore, up 22.8% from a year ago at 1,214 crore. Bajaj Auto’s operating revenue rose 3% to 9,315 crore during the quarter, compared to 9,022 crore in the year-ago quarter.

Beginning March, the company will launch new products every quarter for the next 12-15 months.It will launch a reconfigured, low-cost variant of the Chetak, as well as other products to address the entire spectrum of the two-wheeler market from a low-speed delivery model to premium two-wheelers in the EV segment, Rakesh Sharma, executive director at Bajaj Auto, said.

Hero MotoCorp’s Vida and Chetak are the most expensive e-scooter offerings in the market at present. Bajaj Auto is focusing on building its supply chain and R&D capability, and is looking to set up dedicated Chetak showrooms in major cities. “We are on course with our plans for the Chetak, buttoning down our supply chain and reconfiguring the product to have a lower cost, which will enable a much faster ramp-up between now and 2024.”

“We have the depth in our pocket and a product which enjoys a premium position at the top of the market. Supply chain constraints solved, it is very easy for us to drop prices and garner volumes. Our main focus is working on a configuration of product which allows it to be a sustainable offering. We must prepare ourselves for FAME-II subsidy going away or reduces and all of our R&D effort has been in configuring the internals of the product. The emphasis is to build R&D to help us cut costs to build a strong portfolio and ensure a robustness in supply chains,” Sharma added.

Bajaj Auto manufacturers 3,000-3,500 electric scooters a month, and aims to woo different demographics, such as women and the youth, with a distinct and sharper focus.

“We have reached a certain level where we feel we’ll see expression in the market. We may do 5,000 a month in the next quarter, and add another 50% in next quarter. You’ll see very healthy growth. We have reached a level where we are happy with our cost structures to attack the domestic market vigorously and attack more product segments,” he added. “This will start playing out in 12-15 months in intervals of a quarter. Beginning March to whole of 2024 will be a slew of product launches to expand the Chetak portfolio across segments and user groups.”

The company also has good visibility in terms of semi-conductor chips needed for the manufacturing of the Chetak EVs.

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