ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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In a Seller s Market

In a Seller's Market Hansavivek BAJAJ AUTO is seeking permission for expansion of two-wheeler licensed capacity from 80,000 vehicles to 1,60,000 vehicles per annum which, when approved, will' enable it to manufacture upto two lakh vehicles per annum. This will be in addition to the manufacture of 30,000 scooters in CKD (completely knocked down) packs for supplying to Maharashtra Scooters. The capital cost of the proposed expansion is estimated at Rs. 17.78 crores which is intended to be financed from internal accruals. The research and development department has completed the development of a two-seater 50 cc motorcycle with a high performance engine and a proto- is already on the road. Commercial production of this vehicle is expected to commence in 1980-81. Development work on a 125 cc scooter has also been completed and a couple of prototypes are under trial. The company has successfully modified 'Bajaj Chetak' scooter to conform to US Federal Motor Vehicle Safety standards. During the year ended June 1978, the company produced 1,18,111 scooters including 54,735 in CKD packs. Production of three-wheelers was 18,578 numbers including 2,900 in CKD packs. Sales increased from Rs 47.78 crores to Rs 51.87 crores and, with widened margins, gross profit was up from Rs 10.43 crores to Rs 12.60 crores. Net profit was substantially higher at Rs 4.26 crores compared to the previous year's Rs 3.04 crores and dividend stepped up 4 points to 18 per cent was covered 4.3 times against 4 times previously. The company earned foreign exchange equivalent to Rs 6.67 crores, as against Rs 3.42 crores in the previous year. It exported 25,023 scooters and 2,945 three- wheelers, the bulk of which-were in the form of CKD packs, and were shipped to the company's licensees in Indonesia and Taiwan. The company received foreign exchange equivalent to Rs 30 lakhs as technical knowhow fees. It received 42,611 applications for release of 'Bajaj' scooters under the scheme of priority allotment against inward remittance of foreign exchange. Total foreign exchange earned under this scheme amounted to over Rs 25 crores. From the beginning of 1978, the central government withdrew the Scooter (Distribution and Sale) Control Order thereby removing control on sale and distribution of 'Bajaj' and 'Priya' scooters. In view of the huge backlog of pending orders with dealers and to ensure equitable distribution of vehicles, the company decided to continue the procedure for distribution of scooters similar to that prior to the withdrawal of the order.

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