Bajaj Auto’s motorcycle business unit President, Eric Vas, has said that the two-wheeler manufacturer will see a sales hit of 25% in urban Indian and 50% in the more rural areas. He did indicate that sales were getting back on track towards the end of the month, with a 30% increase in inquiries at showrooms. Nevertheless, the demonetisation decree has had an invariably large impact on the Indian two-wheeler market. Vas directly cited demonetisation as the reason for the expected sales decline, stressing that a lot of customers make their down payments for two-wheelers in cash. After the early-November announcement, however, most people put off big cash-based purchases to save their notes for necessary items.
Vasn noted that it would be difficult to predict the long-term effect on the Indian two-wheeler market, but assured that recent events would not impact any of the company’s upcoming launches. That means that the 15 December launch date of the Bajaj Dominar 400 will remain the same, and production of the upcoming V12 is also likely to remain the same. Vas said that the demonetisation fortunately happened after the 2016 festive season. As a result, dealerships have a reasonable amount of stock. If the move took place during a normal month or before the festive seasons, stocks would have been higher than necessary according to Vas. Also Read: Confirmed: Bajaj Dominar 400 India launch on 15th December 2016
Vas also said that Bajaj Auto has been working with its finance partners and other agencies to help alleviate the problem that its potential customers have been facing. He noted that two financiers have offered schemes that result in almost no down payment, reducing the need for shelling out hard cash for bike purchases. However, Vas added that the schemes would be limited in the number of customers to be addressed.
Before the demonetisation, Bajaj had expected a growth rate of 12% in November over the previous year. But since the 9 November announcement, the automaker’s dealerships around the country have seen an around 80% decline in enquiries. Vas also talked about how dealerships shied away from card payments. In the wake of demonetisation, questions were raised about whether dealers could accept card payments so customers still got to buy their favourite vehicles despite the cash crunch. Vas said that, with the merchant fee included in each debit or credit card transaction, the cost to the dealership would rise tenfold. He said that this issue needs to be addressed if India is to transition to cashless payments.