The two-wheeler section caters to a large viewers — from commuters to passionate fans. However, the commuter section contributes to the biggest chunk of gross sales for two-wheeler producers. When gross sales appeared prefer it was crusing on good waters, the pandemic wave introduced the market crashing down, which remains to be on the highway to restoration. This was a giant blow to the business as a complete, particularly when OEMs have been testing grounds for EVs.
To perceive the state of affairs higher, Mr Rakesh Sharma, Executive Director, Bajaj Auto spoke to Mr Deepanshu Taumar, Deputy Editor, The Financial Express on the First & Last Mile Mobility Conclave 2022 hosted by The Financial Express.
Sharma stated, “I would say that the two-wheeler segment is an index of the well-being of certain segments of our economy. About 60 to 70 per cent of our customers are in the lower half of the demand pyramid, even before the pandemic struck. Because of a variety of factors, including an increase in costs, which led to price hikes, and against a backdrop of an economy which was not thriving, the purchasing power of this segment started to weaken.”
The business took successful when the transition occurred from BS-IV to BS-VI, which elevated the price of automobiles. He provides, “After those price increments, demand had itself weakened. Then came two years of the pandemic, though it is now receding, people are more reassured, leaving this segment of customers economically weak. But the economy is moving up.”
However, in sharing his views on how the electrical automobile business has seen a sturdy progress together with the variety of start-ups which have sprouted, and on the way forward for Internal Combustion Engines (ICE) that also lead the gross sales, Sharma stated, “It is indeed a complex situation because again, there are factors which are driving ICEs into EV and there are certain factors which are restraining this transition.”
“The driving factors are the operating economics with fuel cost crossing Rs 100 and nudging towards Rs 120 mark, which has been a big trigger in the consumers’ mind. Customers are looking for the easy option which is the single biggest driver in my mind. The second is, of course, the support the government wants to reduce its foreign exchange outflow in the purchase of oil, and the commitment to a cleaner environment. So, there is strong government support, whether it comes in form of subsidies, lower road tax, or PLI,” added Sharma.
“However, in the last year, the sales cost has again gone back to 2019 levels, and it is unclear whether the sale costs in the next immediate term of one or two years or at least 18 months would lower or not. Therefore, the acquisition cost of an electric two-wheeler would still be higher than a comparable ICE two-wheeler. I would say certainly, the transition is underway,” defined Sharma.
Bajaj which had exited scooter area for a very long time now. The firm noticed a possibility to make a comeback however with an electrical product providing, it grasped the thought of bringing again an iconic identify, the Chetak. Sharma defined, “When we first started to sense the opportunity of electric mobility, we knew it was going to first occur in the scooter segment because of the way the scooter format is, it lends itself more easily to a transition.”
Bajaj has been cautious over the testing and validation means of EVs, and at occasions, taking extra time than anticipated, however is trying to launch a sturdy product. The Executive Director added, “The unique feature about this transition is that it is not just the change of power pack from gasoline to electric, it is being accompanied by changes in the digital interface, the number of electronics in the vehicle, the interface between the machine and the customer and the ecosystem around it.”
For extra on the dialogue, watch the dialog on the hyperlink under on Rakesh Sharma’s view on the electrification journey forward.
Source: www.financialexpress.com”