Bajaj Auto has witnessed one of its worst ever first-quarter performance in recent years. The world's third-largest scooter producer has witnessed the third successive month of decline in consolidated volumes figures.
Bajaj Auto's consolidated volume figures (two- and three-wheelers) has witnessed a 16 per cent decline during June, on year-on-year basis. In absolute terms, Bajaj Auto has sold 98,000 units in June this year as compared to 114,000 units sold in June 1998.
With this, Bajaj Auto's first quarter has witnessed a 14 per cent decline in volumes figures, as compared to the first quarter of the 1998-99. During April-June 1999, the company has sold 296,000 units as compared to 344,000 units sold during April-June 1999. According to analysts tracking the auto sector, Bajaj Auto has been steadily losing its market share in the scooter segment since the start of this fiscal.
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As a result of the steady decline in volumes market players are expecting a substantially lower net profit for the first quarter. What adds to Bajaj Auto's woes is the fact that its decline in volumes is much steeper than the industry average. In the first two months of this fiscal, Bajaj Auto's decline has been in the order of 17 and 23 per cent, respectively.
Analysts further say that the only segment which witnessed positive growth during April and May is the Japanese motorcycles segment. "Bajaj Auto has been loosing ground in the scooters segment steadily which has been its mainstay all these years," commented an analyst with a foreign brokerage.
Bajaj Auto has also been unable to capitalise on the problems that other two-wheeler manufacturers are going through. "This would have been the best time for Bajaj Auto to increase its market share when both LML and Kinetic Honda are on the recovery path," commented a head of research with a leading domestic broking house. ITLE>