Kolkata: India’s third largest motorcycle maker TVS Motor Co. Ltd announced here on Wednesday that it would use the factory of Mahabharat Motors Manufacturing Co. Pvt. Ltd—a venture of Indonesia’s Salim group and its Indian partner, Prasoon Mukherjee’s Jakarta-based firm Universal Success Enterprises Ltd—to make 100,000 motorbikes a year starting June 2009.
Mahabharat Motors, which had leased 65 acres from the West Bengal government, was the state’s first proposed motorcycle plant. It ran into rough weather after its Chinese technology partner, Zongshen, pulled out citing declining two-wheeler sales in India.
Mukherjee, who is chairman of Universal Success, said, “The arrangement with TVS Motor solves in one stroke our problem of finding a technology partner. It also brings to the state the country’s third largest motorcycle manufacturer.” The factory will be ready in about a year, he added.
TVS said in a statement that Mahabharat Motors would act as contract manufacturer for products “to be decided in due course” under TVS’ “world-class quality control standards and assembly procedures.” TVS, which has a factory each in Tamil Nadu, Karnataka and Himachal Pradesh, will also offer technical support in building Mahabharat Motors’ facility, located 50km from here.
TVS’s chairman and managing director Venu Srinivasan said, “We have a good market in eastern India, and this arrangement will enable us to service it better and reduce logistics cost.”
In February 2006, when the project was flagged off by chief minister Buddhadeb Bhattacharjee, Mahabharat Motors had said it would create capacity to manufacture up to 500,000 motorcycles at its factory.
But work at the factory site slowed as Zongshen exited. Mukherjee had then said his firm should have studied the market better before investing in making two-wheelers.
The West Bengal government, too, seemed unsure about the project’s future because it did not conclude the lease agreement with Mahabharat Motors, and gave it the right to possess the plot instead.