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Taking a dig at the Congress-led United Progressive Alliance (UPA), Bajaj Auto chairman Rahul Bajaj said that India’s corporate sector suffered under the UPA’s regime with entrepreneurs losing their ‘animal spirits’.
While slamming the UPA for its inability in bringing reforms during its second term, Bajaj praised Prime Minister Narendra Modi for the economic development in Gujarat.
“There is a sense of optimism in the air and, like many in the corporate world, I hope the new national government of Mr Modi and his Cabinet colleagues will focus on removing all impediments to growth and thus allow the corporate sector to regain its entrepreneurial animal spirits that had all but disappeared in the past few years under the Congress-led UPA,” Bajaj said in the seventh annual report of Bajaj Auto.
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The automotive sector has been under tremendous stress especially in the past two years with demand declining owing to reasons such as high fuel costs, steep lending rates, dampened buyer sentiment, and high inflation.
Consumers preferred to hold back purchases despite record-high discounts offered by automakers.
“I wish Mr Modi and his team well but with a warning: many believed that when the UPA-II government was formed in 2009 with a stronger mandate and without the drag-down presence of the Communist parties, there would be a burst of much-needed reforms. As we know, these did not occur.
The new NDA (National Democratic Alliance) government must, therefore, ensure that this is not another false dawn. India cannot afford that mistake yet again,” added Bajaj.
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Despite an industry growth of four per cent in motorcycles sales last year, Bajaj Auto’s domestic two-wheeler sales dropped 15 per cent to 2.09 million units from 2.46 million sold in 2012-13, according to data supplied by the Society of Indian Automobile Manufacturers.
The Pune-based company makes bikes under various brands such as Pulsar, Discover, KTM, Platina and Avenger.
The scooter segment, which Bajaj Auto abandoned a few years ago much to the dislike of its chairman, grew 23 per cent last year to 3.6 million units from 2.9 million units.
Three-wheeler sales also fell 17 per cent to 186,912 units during the year.
While Bajaj lauded his company’s efforts in protecting and even maintaining its profit margins despite adverse market conditions, he also questioned the flat growth in revenue and the loss of market share during the reporting year.
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We need to ask why should Bajaj Auto have a flat growth in the top line? Or why should your company, with its outstanding offerings of motorcycles, lose four percentage points of domestic market share to 20 per cent in 2013-14?, Bajaj noted.
He expressed the hope that growth will return under the NDA government. “With the new national government at the helm, I believe that we will again see a period of economic growth and optimism.”
He added that he is hopeful consumers will regain the confidence to make the purchases they had been holding back over the past few years.
“With that, I look forward to a much-needed rise in demand for motorcycles,” Bajaj noted.