Bajaj Auto, the country`s second largest two-wheeler manufacturer, may cut production as it sees a slowdown in motorcycle sales after the current festival season, reports Business Standard.
The company is extending credit directly to dealers and making faster payments to suppliers amid tight liquidity in the financial system.
Strict lending norms by banks and imposition of higher interest rates have affected the sales performance of the company. It is, however, expanding the reach of its in-house financing company, Bajaj Auto Finance, to all outlets to fill the void.
The company has seen a decline of 1.4% in sales during the first half of the current financial year with sales of 786,000.
In comparison, Hero Honda, the market leader, has registered a gain of 20% in sales during the same period at 1.8 million units.
In September, however, sales rose 5.5% on higher exports.
Bajaj Auto recently launched a new motorcycle Platina 125 in an attempt to woo buyers in the festive season. The 125cc bike, which is priced at Rs 39,000 (ex-showroom) is cheaper than India's largest selling 100cc bike Hero Honda Splendor, which is priced at Rs 41,000.
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