Bajaj Tempo said it would invest Rs 400 crore (Rs 4 billion) in setting up engine and truck manufacturing units in collaboration with Germany's Man.
The company will foray into the heavy truck market business early next year, Bajaj Tempo chairman and managing director, Abhay Firodia, said at a press conference at the Auto Expo here.
"We will set up a manufacturing unit in Pithampur which will make high capacity engines, including CDRi (common rail diesel injection) engines. Another unit will be set up in Pune for producing a full range of trucks with higher tonnage. Initially, the unit will make 6,000 trucks per year," Firodia said.
He said a whole range of Man trucks with load carrying capacities of 16-50 tonne will be produced in these facilities.
The Pune-based utility vehicle maker has already entered into an agreement to source select technology for trucks and high capacity engines. The German firm will transfer technology to Bajaj Tempo, while the latter will manufacture components and ship it back to Germany.
Firodia said that the Rs 400 crore outlay will be primarily met through internal accruals. "We prefer not to borrow, he said.
Bajaj Tempo touched a sales revenue of Rs 1,000 crore in calendar 2003, also assembles engines for cars produced by Mercedes Benz India.