Mumbai: Bajaj Auto, the country’s second largest bike maker, expects exports to outgrow domestic sales going ahead as the firm seeks to cash in on vehicle demand in African and Latin American countries.
The firm expects to produce about 4.5 million vehicles in the current financial year that began 1 April with exports coming in at over 1.5 million units, its managing director Rajiv Bajaj said at a press conference.
“We expect exports to even outstrip domestic sales in the near future,” he said, adding exports will probably constitute 35% of total sales for the year ending March 2012.
In contrast, Bajaj Auto’s larger rival Hero MotoCorp has low single digits contribution from exports.
Bajaj’s emphasis on growing exports comes at a time when parts of Africa continent, its largest export market, is seeing political volatility as well as financial instability, due to the political turmoil in the geopolitical region.
Nonetheless, Bajaj is betting big on Africa as well as Latin America as the huge volumes there present a growth opportunity in the long term, he said.
The company, which exports its bikes and three wheelers to 50 countries, is “devising a business model to get into Brazil,” he said, without giving a timeframe.
Bajaj Auto, maker of the popular Pulsar, Avenger and Discover bikes, had on Thursday reported a lower than expected 6.5% rise in second quarter net profit as higher sales were offset by a mark to market forex loss in the quarter.
Analysts said the growth outlook for the two-wheeler giant remained robust especially in view of the ongoing festive season.
Bajaj Auto has earmarked a capex of about Rs 500 crore for FY12 and FY13 and plans to introduce a new Pulsar model next year. It has also completed a feasibility study to set up a plant in Gujarat but has not taken any final decision yet, Bajaj said.
Bajaj Auto shares closed up 1.72% at Rs 1,641.3 in a weak Mumbai market.