ET Now: How worried are you about the cases increasing?
Rakesh Sharma: As a citizen one is always very concerned about the rise in Covid cases. From a business point of view, let me divide my response into two parts — supply side and demand side.
As you know, on the supply side we have lived through more difficult times and more uncertain times. This time last year, nobody knew how to manage the crisis. That turned out to be a very big learning process, not just within the company but also in the company’s engagement with the local administration and employees.
I think a certain rhythm has returned now. One still requires a lot of management time & effort, but I think the supply side will survive this resurgence. With a bit of an effort, we are likely to be able to get on top of it.
On the demand side, whenever there is a lockdown, two things happen. One is the physical impairment of the buying and selling process. The dealerships have to close and the buyers stop visiting the sellers. This leads to knock-on effects on consumer confidence. Salaries — particularly in the less organised sectors — get effected and that impairs purchasing power.
Here I would like to point out something that’s very important for us. The three-wheeler business has showed a very nice — slow and steady but nice — return to normalcy. Now if schools, malls, cinema halls, markets close down one more time, that will make things tough for buyers and financiers of three-wheelers again.
But hopefully, with all the learnings of the recent past, a calibrated response will help us tide over the resurgence. Even if there is a second wave of the pandemic, we hope to survive it without facing the kind of hardship that we did in April-June last year.
So all in all, when it comes to the demand side of things, I am going to be much more confident this time compared to last year.
ET Now: How are you preparing mentally for possible night curfews? Last time it made life very hard for businesses working night shifts.
Rakesh Sharma: Oh yes, absolutely. We have to be in step with that. We are again in touch with local authorities. We are looking at our own transport systems, how we will organise ourselves, etc.
We have already done it once before. It takes some effort, but a positive aspect this time is that we are now familiar with the playbook.
Demand is something we can’t control. But I am hoping that everyone is wiser now and that will surely help if/when there is another lockdown-type situation.
ET Now: Retail numbers suggest that two-wheelers aren’t selling well, but wholesale numbers show a decidedly positive trend. People are confused. So, are two-wheelers selling or not?
Rakesh Sharma: Let me try and clarify. Yes, wholesale numbers are showing growth. Now, is that completely detached from what is happening on the ground? I would not say so. And I am not just speaking for Bajaj Auto; I’ve got a sense of the overall industry.
After the BS-IV, BS-VI changeover the stocks got quite depleted. Then there was a very robust festive season which again meant that the stocks got depleted. It being a multilayered, multilevel distribution system, there has to be a certain kind of a stock level.
The only thing one can say is that yes, we have our own interpretations and business people are always more optimistic. There is a mini season which comes up in the north and central areas led by marriages etc. So we are anticipating that demand will pick up.
When you combine these things — stock levels coming down, a reasonably nice festive season and an anticipation of demand — you get a reasonably clear picture.