Bajaj Auto Sales Ride High On 9% Finance Scheme

Things are looking up again at Bajaj Auto, the largest two-wheeler player in the country. According to market sources, Bajaj has asked its vendors to step up production.

The projected figures for the month of October is placed at 1.44 lakh vehicles. The total vehicle sales in September is expected to be around 1.2 lakh vehicles which is well above the August and July figures of 1.05 lakh and 95,426 vehicles respectively.

Analysts attribute this jump to the 9 per cent finance scheme (16.27 per cent on written down basis) launched by Bajaj Auto Finance on July 23 for the Bajaj vehicles.

 

Major two wheeler dealers in Mumbai have confirmed that the response for the scheme was excellent. Though they agree that the sales have improved, they refuse to give the figures.

The response for the finance scheme was so overwhelming that their is a heavy demand from the dealers end to extend the scheme for one more month. They argue that with the festival season coming up, and the large amount of money being released (around Rs 18,000 crore) to the central government employees next month, the scheme will further boost the sales of Bajaj scooters. Though no information has come in from Bajaj Auto Finance regarding an extension of the scheme, the dealers, however, are confident that it will be extended for another month.

According to market watchers, the reason for introducing the finance scheme was to clear the inventory at the dealers end. Bajaj Auto Finance was able to offer the finance scheme at a lower interest level as it had the backing of the cash-rich Bajaj Autos.

Though the actual September sales figures are not available, the August figures clearly confirm the improvement in sales of Bajajs two wheelers. Among the three segment - scooters, mopeds and motorcycles - only the scooter sales have improved. The Indo-Japanese model (Kawasaki Bajaj) continue to face problems, says an analyst with a broking house, and the bulk of the sales in motor cycle segment has come in form the other model.

During the last six months, the company was holding back on production and was also not pushing sales to the dealers as the latter had high levels of stock. This, according to an analyst, has come down by over 35,000 vehicles during the April-August period.

With demand expected to remain firm and low inventory levels, there will be stock building by the dealers in anticipation of the forthcoming demand which will further boost the companys sales.