Pune-based DSK, which assembles and markets South Korea-based motorcycle manufacturer S&T's Hyosung heavy bikes in India, will invest ₹ 300 crore to set up a 1,00,000 capacity plant.
DSK has finalised a 100-acre plot in Lonand, Sata-ra district, 77 kilometres off Pune.
Sirish Kulkarni, director, DSK said the money will be raised through debt and internal accruals. He said the plant will be commissioned by the first quarter (April-June) of 2014.
Until then, they would be assembling bikes at the Pune facility which rolls out 8-10 units per shift.
Kulkarni mentioned that S&T's engineers will form the core technology team of the assembling operations in India once the plant is commissioned.
Meanwhile, S&T is considering taking the partnership to the next level by becoming an equity partner in the Indian operations.
The current model is primarily a franchise contract agreement.
Justin Lee, head, overseas marketing, S&T Motors said in his recent visit to India that the company would explore the possibility of exporting bikes from India.
This involves entering into a product licensing agreement with DSK and setting up a research and development facility in India.
Kulkarni said DSK sold 128 units of ₹ 2.75 lakh Hyosung 250R and is rolling out 400 units for the festival season.
He said that once the plant is ready, the company will launch 7-8 Hyosung bikes in India.