Bajaj’s Sales Plummet Due To Chip Shortage

Bajaj Auto is one of the largest two and three wheel manufacturers in the world. However, the aftermath of COVID-19 has been impartial, and Bajaj is struggling with sales having dropped 30 percent in Q4 of FY22, and 9 percent overall. Despite having launched two new Pulsar variants last year, the semiconductor chip shortage has curtailed many automotive brands, and giants like Bajaj have not been spared either.

In FY22, Bajaj Auto recorded a sale of 1,641,084 two wheelers in its domestic market as opposed to 1,809,375 units sold in FY21. However, in this financial year, it has recorded an impressive growth of 47 percent in its commercial vehicle sales,restraining the overall drop in sales to 6 percent.

Bajaj continues to post impressive export sales figures with its two wheeler and commercial vehicles posting growth figures of 22 and 21 percent respectively in this financial year. That said, the supply chain problem has affected Bajaj’s Q4 FY22 performance with an aggregate drop of 8 percent in sales figures.   

We think, with the competition ramping up and Bajaj having launched very few models in recent times, the brand has faced a certain degree of dilution in brand recall value. With soaring fuel prices, it could look at adding more names to its 125cc portfolio in the domestic market to attract newer and younger riders, like TVS is pursuing with its Raider – a 125cc sporty commuter.