PUNE, Aug 20: Bajaj Tempo Ltd (BTL) will introduce a four-tonne light commercial vehicle (LCV), the Tempo Excel, by the end of the current fiscal.The shift in the market from LCVs of lower tonnage to higher tonnage has affected sales of the Matador in northern India during 1996-97. The company's performance during the year showed a marginal increase in gross sales, although gross profits dropped significantly. While sales in 1996-97 stood at Rs 686.77 crore against Rs 685.44 crore in 1995-96, gross profit was Rs 76.82 crore (Rs 98.22 crore in 1995-96) and profit after tax was Rs 16.94 crore (Rs 54.85 crore in 1995-96).

The slowdown in the auto industry is not the only cause for the company's poor performance however. The annual report notes that sales were affected additionally due to shifting and relocating of various production activities at Akurdi and labour unrest at Pithampur. The prolonged labour unrest at Pithampur had lead to a lower production of four-wheelers.

The effect of higher excise duties in two successive budgets adversely affected Bajaj Tempo's flagship product, the Matador and the Tempo Trax. The company penetrated new markets with the launch of its three-wheeler, six-seater Minidor, in both goods and passenger versions. This is expected to contribute substantially to the company's product mix with production infrastructure of 2,000 units a month becoming operational during the current year.Bajaj Tempo's foray into the tractor segment began with the introduction of the Ox 45, a 45hp tractor, in southern Maharashtra. Efforts are currently on to achieve mass production levels. While development of the Ox 35 tractor has been completed, plans are afoot to extend the tractor range to include 4x4 versions and 25 hp tractors.

The company expects to export its Tempo Trax in the current year to Germany after its successful participation in the Munich Off-Road Vehicles Show in May, 1997.

The board has recommended a dividend of Rs 5 a share for its 98.81 lakh equity shares of Rs 10 each and Re 1 a share on the 32.81 lakh rights shares issued in October 1996. The dividend outgo for 1996-97 will be Rs 5.79 crore.

Projections made in the letter of offer at the time of the rights issue of Rs 32.96 crore in October 1996 have come a cropper. The offer document for the rights issue of 32,96,446 shares of Rs 10 each were offered at a premium of Rs 90 per share to part finance creation of production had projected investment of Rs 86 crore while actual investment stood at Rs 87.69 crore; sales were projected at Rs 890 crore while the actual figure was Rs 686 crore. The profit after tax was projected at Rs 10.42 crore as against the actual figure of Rs 6.38 crore.Industrial relations continued to plague the Pithampur plant. The trouble has been attributed to inter-union rivalry. The company entered into a three-year wage accord with the union at Akurdi.Bajaj Tempo had engaged the services of Roland Berger, international consultants, to undertake an exercise on `lean manufacturing', and to define a new management structure.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.