"The turnover will decline to about Rs 3,500 crore from over Rs 3,700 crore achieved last year. Profits will also fall," Bajaj Auto chairman and managing director Rahul Bajaj said.

"The turnover will be hit also due to drop in non-operating income," Mr Bajaj said but declined to give figures.

During 1999-2000, the company recorded a net profit of Rs 459 crore over a sales of Rs 3,769 crore.

Mr Bajaj said total sales would decline to about 12 lakh units in this fiscal from 14.3 lakh units sold in the previous fiscal due to the current recessionary trend in the scooter segment, the company's mainstay.

Stating that 2000-01 was the "worst year in the company's history", he said Bajaj Auto was likely to post handsome profits over a sales of 16 lakh units in 2002-03. "The year after (2002-03) should be great," he added.

Bajaj Auto officials had earlier said margins from motorcycles were much lower than scooters and the company's bottomline, would be hit more than the topline in this fiscal.

However, Bajaj exuded confidence and said "we want to continue to remain the king of scooters".

He said the Pune-based firm was reworking its strategies, including launching new models, especially in the motorcycle segment to tide over the current downtrend in sales. As part of Bajaj Auto's strategy, a new 175cc sporty motorcycle `Pulsar' and a 100cc motorcycle `Acer' would be launched by May-June this year.

"The response to the recently launched 175cc 'Eliminator' motorcycle is beyond our expectations, as we had introduced it only as a high volume product," Mr Bajaj said.

The company is aiming to make 2,500-3,000 `Eliminator' motorcycles per month from 2001-02, he said. "The move will be towards four-stroke models as two-stroke models are likely to be phased out as per law from April 2003," Mr Bajaj said, adding four-stroke models were expected to constitute 80 per cent of total production from April 2003 as against the present 50 per cent.

He said motorcycles would constitute a large part of the company's sales in the coming years. "We are stepping up monthly motorcycle production to 50,000 units in a few months time from 35,000 units at present," Mr Bajaj added.

During April-February 2000-01, sales have dropped by 37.7 per cent in scooters to 3.24 lakh units, while motorcycle sales have increased by 29 per cent to 4.89 lakh units over the same period last fiscal.

Mopeds and three-wheelers sales also fell by 12.7 per cent and seven per cent to 55,784 units and 1.45 lakh units respectively during the review period. During 1999-2000, Bajaj Auto had sold 12.49 lakh vehicles, which included 5.76 lakh scooters, 4.31 lakh motorycles, 69,197 mopeds and 1.71 lakh three-wheelers. Bajaj Auto is in the process of revamping its marketing-sales department and initiating cost-cutting measures to boost sales and margins as suggested by consultancy firm McKinsey & Company.

The company's net profit fell by 47.3 per cent to Rs 198.63 crore during April-December 2000-01 as against Rs 377.12 crore, achieved in the previous fiscal.

Sales had however, increased by a marginal 2.1 per cent to Rs 3,021.18 crore over Rs 2,957.19 crore achieved in the year-on-year period. The fall in net profit was mainly due to the overall shrinkage of the geared scooter and step-through vehicle segments, which registered a 37 per cent fall (7.2 lakh to 4.50 lakh) and by 22 per cent (1.25 lakh to 97,000) respectively during April-December 2000-01 over the year-ago period.

Bajaj had also spent Rs 26.50 crore towards Voluntary Retirement Scheme which was opted by about 2,000 employees.

In the two and three wheelers' segment, it produced 9.56 lakh units during April-December 2000-01 as against 10.19 lakh units last year.

Sales had however, dropped to 9.25 lakh units over 10.05 lakh units sold in the year-on-year period. In the ungeared scooter segment, the company registered a 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 last year and also increased its market share by 0.2 per cent to 19.4 per cent.