Mumbai: Two-wheeler major Bajaj Auto is setting up a new facility in Pune for producing a new range of three and four-wheelers. The new facility, involving an investment of around Rs 2,000 crore, will have a manufacturing capacity of 500,000 vehicles per year.
The unit, which will produce a whole new range of three-wheelers and light load-carrying four-wheelers which have been developed in-house, is expected to commence production in 2009.
The plant will start up with a capacity of 150,000 units and step up capacity to 500,000 units in 3-4 years. The project will use a good part of Bajaj Auto's capex plan over the next three years.
Bajaj Auto ED Sanjeev Bajaj says, " The total capex now for Bajaj Auto over the next three years will be in the region for about Rs 1,500 crore and off that this particular project in its first phase will take about Rs 600-Rs 700 crore."
"Three-wheelers and light four-wheelers occupy an important and growing segment of the automobile industry in India and in many foreign markets. Our R&D is developing new products for this segment and we propose to build a new plant at Chakan to produce this new range of products," Bajaj Auto chairman Rahul Bajaj said.
The company has signed a memorandum of understanding (MoU) with the Maharashtra government for acquisition of 250 acres of land at Chakan, in Pune. Bajaj Auto, along with its captive process vendors, will invest Rs 1,750 crore in the initial phase while an additional investment of Rs 250 crore is expected from vendors supplying components to the new plant.
It's Destination Maharashtra for auto companies. The state government expects a good amount of investment from the automobile sector, according to the state secretary (industries) VK Jairath.
While Bajaj is investing Rs 2,000 crore, General Motors is setting up a Rs 1,350 crore facility. Mahindra has lined up two projects worth about Rs 1,500 crore. The investment proposals in the auto sector have already crossed Rs 5,000-Rs 6,000 crore, he pointed out.
Meanwhile, sources said, German carmaker Volkswagen also visited Chakan and may set up an assembly plant here. Bajaj Auto's first 4-wheeler - a cargo carrier - will compete with Tatas' small truck, Ace. Bajaj Auto chairman says that nothing stops the company from entering the passenger car industry as well.