China's largest commercial vehicle maker Beiqi Foton plans to invest Rs 1,676 crore for a one-lakh units per annum plant in India and plans to launch its first product in the lucrative domestic market by 2013.
The manufacturing facility, the company's first outside mainland China, will be located in Western Maharashtra and it has already zeroed in on three potential sites for the plant.
"India is a big opportunity and we plan to start rolling- out vehicles by 2013 from the plant," the company's executive vice-president for India operations R Shankar said after Foton and the Maharashtra Government inked an MoU to set up the facility.
The USD 400-million investment by Foton, which produced seven lakh vehicles last year, will be the highest foreign direct investment by a Chinese company in India and the company is exploring options to sell light, medium and heavy trucks in India, Shankar said.
The Beijing-based company exports to over 100 countries across the world and operates six manufacturing plants in China, apart from running KD (knock-down) operations in Russia, Iran, Pakistan, Vietnam, Indonesia and Kenya where vehicles are assembled. Shankar declined to comment further on its India strategy, stating it is just a 2-3-months old idea which is now taking shape.
The company has snapped up Rakesh Kalra, who will head the operations in India as the managing director, from rival Mahindra Navistar.
Recent times have witnessed quite a buzz in the Indian commercial vehicle segment -- which clocked sales of 6,76,408 units last fiscal -- with the entry of global players like Navistar and Marcopolo, among others. A majority of these have come in tie-ups with local players, unlike Foton. When asked about the same, Shankar said, "right now we have decided to coming by ourselves in the market. We have studied the Indian market and will come up with products keeping in mind the local conditions".
Maharashtra Industrial Development Corporation Chief Executive K Shivaji said the company is looking for a 200-acre land parcel for its plant. Some of the destinations on its radar are Chakan and Khed (in Pune district) and a site in Satara district, he said.
It will directly create employment for over 1,000 people apart from creating opportunities for local vendors, Shivaji said, indicating Foton's plans for investing in Maharashtra will not stop with the plant.