MUMBAI (The Telegraph) – Bajaj Auto Ltd will invest Rs 1,500 crore in new capacities and research and development over the next three years.

Bajaj Auto will roll out motorcycles in Iran in a joint venture with a local partner. The company, however, will not invest in that country. It already has a facility in Indonesia, which will begin production of motorcycles and three-wheelers by the year-end.

The company board yesterday approved various proposals and said the expansion would be funded by internal accruals. According to the plans, Bajaj Auto will set up a greenfield project at Chakan in Maharashtra to manufacture “new generation” three-wheelers and light cargo four-wheelers.

The company’s new bike plant, which will start operations in 2007, will come up at Pantnagar with a capacity of 1 million motorcycles.

The company also plans to raise its capacity from 3.5 million vehicles per annum to 5.1 million by 2009. The sales target has been set at 2.85 million vehicles for the year to March 2007, which includes exports of about 365000 units.

The company expects 20 percent of its overall revenue to come from exports over the next three to four years.

“It is about 11 percent now, and we are keen to get a larger chunk of the global markets over the next three to four years,” company executive director Sanjiv Bajaj said.

It is also testing an assembly line in Nigeria with a local partner.

The company has crossed the 2-million-mark in vehicles sales in February 2006.

It expects to close the year with a sales figure of 2.2 million against 1.6 million in 2004-05.

The sales of two and three-wheeler vehicles have grown 24 percent year-on-year led by motorcycles against the industry growth of 18.5 percent, Bajaj Auto said.

The company had earlier said it would introduce a new bike in the “value segment” and roll out four models in the un-geared scooters and motorcycle categories in 2006-07.

Bajaj Auto has reported a 29 percent rise in two-wheeler sales in February 2006 compared with the same month last year, even as it said it would launch a motorcycle model in April.

The company has sold 179,880 two-wheelers against 139,573 in the same month a year ago. Motorcycle sales jumped by 35 percent in February at 175,256 against 129,409 in the same month last year.

Cumulative motorcycle sales during the April-February period increased by 31 percent at 1,728,297 units against 1,315,003 units in the year-ago period.