BS cited a senior official of Bajaj Auto recently saying that a slump in demand lately for Bajaj motorcycles, the company has decided to cut production of 2 wheelers as a step towards product rationalization.

Mr Sanjiv Bajaj executive director Bajaj Auto said that "We are preparing for a slowdown. This is the festive season, so demand is high but product rationalization may happen from mid November."

As per report, the company is also looking at extending credit directly to dealers and making faster payments to suppliers. The statement has come amid uneasy financial conditions currently prevailing in the market which was preceded by high inflation rates, denting consumers' buying sentiment.

Stringent lending norms by banks and imposition of higher interest rates were marred the company's sales performance. It is however expanding the reach of its in house financing company, Bajaj Auto Finance, to all outlets to fill the void.

The report added that the company which is the country's second largest bike maker after Hero Honda has seen a decline of 1.4% in sales during the recently concluded H1 of the current financial year with sales 7.86 million.

In comparison, Hero Honda has posted a gain of 20% in volumes during the same period clocking sales of 1.8 million units.

Bajaj Auto had recently launched a new motorcycle in the market Platina 125 in an attempt to woo the festive buyer. It will also launch a second bike based on the same platform this year before December.