Bajaj to launch quadricycle by October

Ministry of Roads & Transport has confirmed that quadricycles could start plying on Indian roads by October

Bajaj Auto, India's second largest two-wheeler manufacturer, has said that it will begin retail sales of its four-wheeled passenger vehicle, popularly called as quadricycle, by October.

With Ministry of Roads & Transport confirming that quadricycles could start plying on Indian roads by October 2014, Bajaj Auto is losing no time and eagerly testing the Bajaj RE60.

"According to our interaction with the management, RE60 will come out in the third quarter of the current year", said a report prepared by Prabhudas Lilladhar.

The Pune-based company has created a capacity of 60,000 per annum for the RE60 at its Waluj plant in Aurangabad in Maharashtra. It has also developed a left-hand drive version of the RE60 for export markets.

"As far as the numbers and as far as the impact on the P&L (a/c) is concerned, it will not be significant. We believe quadricycle could add Rs 480 crore this year and Rs 850 crore next year in incremental revenues to the topline. In terms of profitability, it could add Rs 58 crore and Rs140 crore in FY15 & FY16 respectively" added the report.

Additonally, the state of Maharashtra has issued around 80,000 permits for three-wheelers while Delhi and Andhra Pradesh are too expected to issue new permits. Such new permits are expected to push volume growth by 12% this year as against a fall of 5.8% last year.

Bajaj Auto has hinted at a recovery in the two-wheeler industry led by the motorcycle category. The company has lined up a few launches for the year under the Discover and Pulsar brands. Last year at 2.09 million sales, Bajaj Auto marked a fall of 15% as against an industry rise of 4% at 10.47 million units in the motorcycle segment.

Excluding the RE60 the current capacity stands at 5.7 million units across three plants. Last year its production stood at 3.87 million units, translating into a capacity utilisation of 68%.