Indian IT firm Xenitis in JV with China's Guangzhou Motors

In a surprising move, Indian IT hardware company Xenitis has forged a joint venture with China's Guangzhou Motors to float a company, aptly called Global Automobile.

The company will roll out their XOOM bikes in four variants-100cc, 125cc, 150cc, 180cc. And instead of using China as a manufacturing base, the JV will actually set up shop in India''s communist bastion — West Bengal (See: Global Motors' Xooma to vroom in January)

Global Automobile has invested Rs280 crore for the two-wheeler venture and its Hooghly plant will produce three lakh units annually starting January 2007.

What will be interesting to watch is just how attractively priced these bikes will be. Its not just two wheeler makers who should be worried, this Indo-China venture could be pose a threat to Ratan Tata's dream project of a Rs1-lakh car.

The company is setting up 50 dealerships in the east and about 30 dealerships in towns like Chandigarh, Goa, Pune and Gurgaon. With margins already under pressure, the Indian auto industry has another worry round the bend.