Mumbai, Aug. 29: Bajaj Auto will shut down its Akurdi unit in Pune from September 1.

The company said it had to close Akurdi as the plant was a high-cost unit.

Though the unit will not manufacture any vehicles from next month, it will continue to supply components. Corporate functions will continue as well, managing director Rajiv Bajaj said today in a statement.

Bajaj had recently said at the company’s annual general meeting that Akurdi may be shut down because it was unviable.

“It must be reiterated that the closure is necessitated by the impact of government policies on capacity rationalisation — chiefly the regional distortions created by inconsistent tax benefits — and the continuing evil of octroi in Maharashtra. It is not being closed because of any failure on the part of the workmen or the management,” the company said.

Over the past months, Bajaj Auto has been focussing on production facilities in Chakan and Uttarakhand. Moreover, it has suffered because of a lower demand for two-wheelers.