KOLKATA: With the festive season round the corner, Bajaj Auto Ltd (BAL) expects sharp sales growth in the third quarter of 2007-08. To achieve this, the company plans to roll out new two-wheeler models on Indian roads and come up with a slew of attractive offers for customers in the coming months.
Bajaj Auto, which is a major player in the national two/three-wheeler space, has registered a progressive decline in sales in the first five months this fiscal. Sales plummeted by 10% during April-August due to high inflation coupled with a rising interest rate. The company sold 9,53,188 units of vehicles in the first five months of 2007-08 compared to 1,057,480 units of vehicles sold in the earlier corresponding period.
Talking to ET, BAL vice-chairman Madhur Bajaj said: “The festival season should bring good news. Diwali is the time when we generally witness strong sales. We are confident of witnessing growth in third quarter sales. We will offer new models in coming months. To beef up sales, we are likely to come up with exciting offers for Indian consumers.”
Mr Bajaj is also hopeful there will be a correction in interest rate in the coming months which will help the auto industry to grow. “The inflation has also eased to 3.25%. This is a positive sign for the overall economy. This will have an impact on the interest rate as well,” he added.
For the ensuing festive season, the company has recently launched 125cc DTS-Si motorcycle. It aims to sell 20,000 units of this new model this month. It hopes to reach a sales of 50,000 units of this model in the next two months.
On the company’s Akurdi plant in Pune, Mr Bajaj said: “We have to pay salaries to 1,500 workers at our Akurdi plant even though they are sitting idle. We’ve stopped manufacturing auto units there. But auto component manufacturing is going on.”
It is well known that BAL recently stopped production of vehicles at its Akurdi plant. On the company’s move to stop production of vehicles at the facility, Mr Bajaj said: “The high rate of octroi was increasing our production cost by Rs 7,000-8,000 per vehicle. Such high-cost of production was hurting our revenues at a time when the auto industry is going through a slump.”
BAL is working on three options for these 1,500 workers. “There are three options that we may consider. We can have a voluntary retirement scheme (VRS) for these people. We may also involve them in some other activities in the Akurdi plant itself. We may transfer some of these workers to our dealers,” Mr Bajaj said.
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