Bajaj Auto Says Container Shortage Remains A Challenge
Bajaj Auto Ltd. said a shortage of shipping containers remains a challenge for the two-wheeler maker even as its exports surged to a record for the quarter ended December.
“15% of the order books have spilled over into the next month,” Rakesh Sharma, executive director of the maker of Pulsar and Discover bikes, said in post-earnings call with analysts, adding that the firm is entering into long-term contracts with shipping lines in key markets to mitigate the impact.
Sharma expects the disruption to continue for 3-4 months as the bulk of container traffic is getting stuck in the Europe-China-U.S. routes.
BloombergQuint had reported last month that the Indian automakers could face disruption due to shortage of shipping containers and rising freight costs.
Bajaj Auto reported its highest-ever quarterly profit and revenue as exports jumped and domestic sales improved, aided by festive push and rising demand for personal mobility following the Covid-19 pandemic.
The Pune based-firm’s total exports grew 22% year-on-year to 6.87 lakh units, aided by a recovery in most of its overseas markets for three-wheelers and motorcycles. While South Asia is back to pre-Covid levels, with the exception of Sri Lanka, Africa and Latin America are back at 80-90% of the pre-Covid levels, he said. “Philippines, one of the key markets, is at 50%.”
He said if demand improves further in the Asean region, the company should be able to deliver its best-ever fourth quarter in terms of exports.
Sharma also said a persistent increase in commodity prices remains a concern, which could impact its margin. Bajaj Auto has already increased prices across its motorcycle range by 1-3% in several markets.