Bajaj Auto sees no cost threat

Business Standard, 26.05.10

The country's second largest bike-maker Bajaj Auto today said that the rise in input costs, for commodities such as steel and rubber, was unlikely to eat into the profit margins of the firm due to a shift in consumer preference towards more expensive offerings.

Bajaj While claiming that the two-wheeler major was cushioned against dramatic price fluctuations through standard half-yearly contracts for major input requirements, S Sridhar, Bajaj Auto Chief Executive Officer (2-Wheelers) explained that the majority of sales were taking place in the mid-priced section.

"Unlike last year, when the size of the entry-level market was larger, this fiscal consumers have been shifting towards the higher (priced) category. As a result, the margins are better. We have been able to benefit from our portfolio," Sridhar said.