Bajaj Auto to invest Rs 1,500 crore; to expand capacity to 51 lakh units

Our Corporate Bureau
13 March 2006

Bajaj Auto is planning to raise production capacity to 51 lakh units — 46 lakh two-wheelers and five lakh three- and four-wheelers per year by 2009. In the first phase of the expansion, the company plans to expand motorcycle capacity to 36 lakh units per year by the year 2007.

The company would set up a new green field unit at Pantnagar in the state of Uttaranchal. New manufacturing facilities in Uttaranchal are eligible for significant tax benefits. Tata Motors is also considering a new facility in Uttaranchal for its newly launched small commercial vehicle.

Bajaj Auto would also set up a new manufacturing unit at Chakan in Maharashtra for three- and four-wheelers. The company is reportedly developing a four-wheel light commercial vehicle, which would be manufactured in this new facility. The company would also expand capacities at its existing plants in Akurdi and Chakan.

The company would spend up to Rs 1,500 crore on these expansion projects over the next three years. The investments would be funded entirely from internal accruals.

The company has set a sales target of 28.5 lakh units for the financial year 2006-07, including exports of 3.65 lakh units. It is aiming to sell a total of 25.5 lakh two-wheelers and three lakh three-wheelers.

Bajaj Auto had last year entered into an alliance with a local group to market its products in Pakistan. The company is also considering major expansion into the Far East markets followed by South America.