Bajaj Auto to reduce production by as much as 25% in its export-oriented production plants

27 Feb 2023 , 10:13 AM

Bajaj Auto is expected to cut motorcycle and three-wheeler production by up to 25% across its export-focused plants next month, reflecting uncertainty in its largest market, Nigeria.

Multiple sources familiar with the automaker’s cautious production plans told ET that Bajaj Auto, which manufactures Pulsar and KTM motorcycles, is likely to produce around 250,000-270,000 units in March, compared to an average of 338,000 units in each of the first nine months of FY23.

This could reduce cumulative capacity utilization at its plants to less than 50%. Bajaj Auto has a monthly production capacity of 550,000 units.

If Bajaj Auto’s two-wheeler export volume falls by 100,000 units in March 2023, it will be the company’s lowest overseas shipments since July 2020, when the first lockdown crimped production. In January 2023, Bajaj’s export volume was 100,679 units, the lowest in 30 months. Exports have been declining for six months in a row, with a 34.4% year-on-year decline.

It is anticipated that the Waluj plant of the company, where Boxer, CT, and Platina models are produced, will decrease its production to below 90,000 units in March, as opposed to its monthly capability of 225,000 units.

This follows a record year for exports in both value and volume terms in FY22. The Pune-based company is expected to end FY23 with a 20-25% year-on-year drop in overseas shipments, bringing total sales volume for the year to 4.1 million units.

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