Utility vehicle maker Mahindra & Mahindra plans to set up a motorcycle assembly plant at Haridwar in Uttaranchal at an estimated investment of Rs 300-400 crore (Rs 3-4 billion).
The 30,000-unit capacity plant was expected to start marketing 100 cc and 125/150 cc bikes by early 2008, said sources in M&M. The company is understood to have tied up with Chinese two-wheeler maker Lifan, which will supply the manufacturing technology.
The plant will be set up adjacent to M&M's three-wheeler facility in Haridwar, which was inaugurated in late 2005. The motorcycle plant will also make engines and critical components needed for two-wheelers.
M&M is currently scouting for component makers for its bikes. It expects to sell 30,000-50,000 bikes in the first year after the launch. The motorcycles would be competitively priced, said M&M sources.
"M&M is currently conducting the final stages of prototype testing of its 100 and 125/150 cc motorcycles at its testing facility near Hyderabad. Soon, we will apply for certification with the Automotive Research Association of India," said M&M sources.
Prototype testing checks the riding credentials of a motorcycle in response to its engine and other critical components. Elements like fuel and component efficiency are judged by riding a motorcycle for more than a 1,000 km.
The entry of M&M is expected to shake up the existing motorcycle market dominated by Hero Honda, Bajaj and TVS. The size of the two-wheeler market in India currently is seven million, of which 4.5-5 million are cornered by motorcycles.
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