The company indicated that they have cut the prices of their 3 wheelers by 10 per cent while the 2 wheeler segment saw price cuts to the tune of 5 - 14 per cent depending on the model of the product.
Sri Lanka is one of the biggest markets for the auto major in terms of export and accounts for 17 - 18 per cent of the export sales. The island market accounts for 5 - 7 per cent of the total sales of the company. Post the duty hike, exports to Sri Lanka have virtually been zero with dealers just looking to clear the pending inventory of the products.
The hit due to the price cut will be shared between the company and the dealers. The ratio of sharing of the price cut was not disclosed by the company.
Rakesh Sharma, President of International Operations at Bajaj Auto confirmed the price cut but refrained from indicating the deals of agreement reached between Bajaj Auto and the dealers in Sri Lanka. Bajaj Auto had in its earlier interactions with ET Now indicated that it was sending team to Sri Lanka to assess the situation post the excise duty hike by the Sri Lankan government.
Sri Lanka had hiked duty on 3 wheelers by 51 per cent - 61 per cent and the duty on 2 wheelers by 60 - 100 per cent in April to curtail its fiscal deficit in April 2012.
Prices of Bajaj's motorcycles were hiked by around 29 per cent and three-wheeler prices increased by around 32 per cent in Sri Lanka after the import duty hike.
Bajaj Auto sells around 20,000 units of products to Sri Lanka every month. (The Economic Times)