Mumbai: Bajaj Auto will shut down its plant at Akurdi on the outskirts of Pune and shift its production to Waluj near Aurangabad from September.

Bajaj Auto, India's second largest two-wheeler maker, also announced a four-day week at its Akurdi plant effective 1 September. The decision is expected to cut down losses due to a steep fall in the demand for two-wheelers. Sources say it will gain Rs 1,000 per vehicle from the shift.

Bajaj's corporate office will continue to remain at Akurdi. The 200 acre premises will also house an R&D centre and an export, purchase and financing office. An R&D and engineering centre will come up on 100 acres.

Bajaj Auto has invested about Rs 200 crore on R&D in the past two years and proposes to invest another Rs 100 crore on a learning centre on a 21 acre plot.

While Bajaj Auto gets no incentives in Akurdi, it gets reasonable benefits in other locations such as Chakan in Pune, Waluj in Aurangabad and Pantnagar in Uttrakhand.

At present, its motorcycles are manufactured at Waluj, Chakan near Pune and Pantnagar in Uttarakhand, while the scooter Krystal is made at Akurdi. The company's three-wheeler production is centred at Waluj with some volumes coming from Pant Nagar as well.

Bajaj makes smaller motorcycles at its Pantnagar plant while the higher-end Pulsar 150cc, 180cc, 200cc and 220cc are being made at its plant at Chakan near Pune. Bajaj is also setting up a 4-wheeler plant in Chakan.

Production at Bajaj's Akurdi plant has been on a decline for some time now. The number of two-wheelers produced came down from 350,000 in 2005-06 to 50,000 in 2006-07.

Rajiv Bajaj, managing director, Bajaj Auto, had told the company's annual general meeting in July that the company was persuading workers to accept voluntary retirement scheme. "We will do something about it (the plant)," he had said.

Bajaj Auto has been reducing the number of its employees at Akurdi through a series of voluntary retirement schemes since the last eight years or so. The workforce at Akurdi has come down from 4,500 to around 2,000 in the last few years.