Behind Bajaj Auto’s Q2 surge lies a tale of India's failed urban transport
₹1,836.14 crore, surpassing expectations. Surprisingly, this growth didn't emanate from their two-wheeler sales, which declined 13.5% in in volume terms to 881,583 units, but from the legacy three-wheeler auto rickshaws, a segment Bajaj commands with a 60% market share. Sales of these high margin vehicles--both the passenger and goods transport versions, used for last-mile logistics--have been surging in India.
According to Society of Indian Automobile Manufacturers (SIAM), three-wheeler production, which was clucking numbers in excess of 1 million between 2017-18 and 2019-20, slumped to 614,613 units during the pandemic-hit 2020-21 but rebounded strongly to 855,696 units in FY23. According to SIAM, domestic three-wheeler sales, usually less than the numbers produced to account for pipeline stocking, stood at 339,690 units during April-September. With the October-March period accounting for the chunk of sales , given festivals and fiscal year closing, last year’s numbers look set to be surpassed.
Add electric three-wheelers to this and the picture gets even better. Electric three-wheelers sales surged a massive 118.25% to 404,143 units in FY23 from 185,173 units sold a year ago. More than half of India’s three-wheeler registrations in 2022 were of the electric variety, according to an IEA April report.
Yet, underlying this success is a stark reality: the inadequacy of India's public transport system. The burgeoning demand for auto-rickshaws and similar intermediate public transport is symptomatic of the lack of robust, accessible mass public transport in India’s explosively growing but chaotically run cities. Auto-rickshaws and their four-wheeled cousins fall under the category of intermediate public transport or para
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