"Mckinsey has recommended measures for revamping our marketing and sales strategies as well as cost-cutting steps which we are studying and will implement within a few months," Bajaj Auto general manager (corporate finance) Sanjiv Bajaj said.

Mckinsey had given four basic suggestions in its report which was recently submitted to the Pune-based firm

It said Bajaj Auto must come out with new models in the two-wheeler and three-wheeler segment to sustain its market share in the competitive domestic market. The consulting firm also recommended tightening up of the supply chain mechanism and gearing up of the distribution system, as it felt there were too many gaps between the production and distribution process.

It advised Bajaj Auto to take steps for cutting costs, especially overheads, including salaries.

"We wanted Mckinsey to verify our performance levels, what we are doing, its drawbacks, scope for improvement and also advise on possible restructuring," Bajaj Auto said. Bajaj Auto would increase focus on its five different products - scooters, motorcycles, step-thru scooters, scooterettes and three-wheelers - from production to the dealers' front, Bajaj said.

"We will strengthen our marketing and sales department by creating separate teams for different products in the coming months," he said.

He said the company would create one team each for motorcycles and three-wheelers and another for scooters, scooterettes and mopeds.

To arrest declining scooter sales, Bajaj Auto has introduced a low cost variant of its `chetak' scooter and a four-stroke version of the step-thru M-80. It is also planning to roll out more four-stroke scooters this year.

To expand its share in the booming motorcycle market, the company will also roll out a 100 cc `Kawasaki acer' by March and a 175 cc `Pulsar' sporty bike in April this year.

It had launched a 175 cc motorcycle `Eliminator' in tie-up with Kawasaki heavy industries of Japan in January, 2001.

Bajaj Auto's net profit declined by 47.3 per cent to Rs 198.63 crore during April-December 2000-01, as against Rs 377.12 crore. Sales, however, increased by a marginal 2.1 per cent to Rs 3,021.18 crore over Rs 2957.19 crore in the year-on-year period.

Bajaj had also spent Rs 26.50 crore towards a voluntary retirement scheme which was opted by about 2,000 employees.

In the two and three-wheelers (including ckd kits) segment, it produced 9.56 lakh units as against 10.19 lakh in the nine months ended December 1999, while it sold 9.25 lakh units during the same period as against 10.05 lakh in April-December 1999-2000.

In the ungeared-scooter segment, the company registered 19 per cent growth in volumes by selling 62,945 units during April-December 2000-01, over 52,796 units sold in the same period of 1999-00 and also increased its market share by 0.2 per cent to 19.4 per cent.

However, total volumes declined by 38.6 per cent in the geared scooter segment with sales of 3,27,658 units in the reference period as compared to 5,33,887 sold in the same period last year.

(PTI)