Bajaj Auto Faces Severe Supply Constraints, Dealers Worried — Exclusive

Multiple dealers of Bajaj Auto have shared that they have a fourth of the usual inventory levels, Pradeep Agarwal, state chairperson of the Odisha Federation of Automobile Dealers Associations, said over the phone from Mumbai. "This comes on top of existing demand shortage in the industry which has already been hurting the automaker."

Nearly a dozen dealers of Bajaj Auto told BQ Prime that they have barely a week of stock. They didn’t want to be identified out of business concerns.

Supply snarls hurt Bajaj Auto the most in May as its volumes contracted 11% month-on-month while peers Hero MotoCorp Ltd., TVS Motor Co. Ltd., and Honda Motorcycle and Scooters India Pvt. Ltd. reported growth.

While chip shortage has hurt automakers across categories, India’s two-wheeler industry has been grappling with poor demand, rising prices of vehicles and costlier fuel.

Also Read: Indian Auto Sector’s Nascent Rebound Is Again At Risk

For Bajaj Auto, supply more than halved in May and the shortage is across the full range of its motorcycles, one of the dealers quoted earlier said.

The second dealer, based out of Uttar Pradesh, said he has just 20% of its total inventory and that the company has informed that the pain will continue till mid-July.

The firm is facing some issues with vendors that have added to the pain, the dealers said.

Bajaj Auto did not comment on the vendor issue but said it’s experiencing a disruption in the supply of semiconductors for the last three months.

“We have now identified and developed alternate vendors and are scaling up supplies from them,” Rakesh Sharma, executive director at Bajaj Auto, said in an emailed response to BQ Prime’s queries. Due to the disruption, channel stocks in India are currently low but will improve as soon as supplies are normalised, he said.

Also Read: The Heady Days Of India’s Conventional Two-Wheeler Industry Are Over