Atlas plans raising bicycle prices

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Chandigarh, May 19:: Even after increasing the prices of bicycles by 20 to 25 per cent in the past three months, leading cycle maker Atlas Cycles is again mulling to hike the prices by Rs 35-40 per unit next month in view of spiraling input cost.

"We are again thinking of increasing the prices of our bicycles in the range of Rs 35-40 per cycle in the month of June as the cost of input, including steel, chemicals, tyres and tubes etc have risen so much that it is not possible for us to absorb the additional cost," Atlas Cycles (Haryana) Ltd Vice President Angad Kapur said in Chandigarh.

The company has jacked up the bicycle prices three times in a row in the month of February, March and April this year because of rising cost of raw materials.

"In the bicycle business you have wafer thin margins varying between 3-4 per cent which have been threatened by the surging input cost led by steel prices," he asserted.

Significantly, the company was again forced to think over raising its bicycle prices in light of the fact that the company had observed 10 per cent decline in sales of its standard model of bicycle on rise in the bicycle prices in the past couple of months.

The company has projected just 2.54 per cent growth in its total sales during 2008-09, compared to 7.33 sales growth achieved in 2007-08. "We are anticipating a turnover of Rs 600 crore by the end of 2008-09, against Rs 585 crore of sales achieved in 2007-08," he said.

The company, which manufactured 33 lakh bicycles last year, is looking at tapping export markets in African and Latin American countries and plans to enhance the share of export in total sales from 5 per cent at present to 10 per cent in 2008-09.

"As part of our strategy to boost our exports, we have now plans to open our sales depot in one of the African countries soon," he said while adding, "it will reduce our lead time to zero which will eventually facilitate quick delivery of our bicycles in this market."