NEW DELHI, Nov 23: Hero Honda Motors is planning to launch a 160 cc four stroke bike priced around Rs 50,000 in the course of next year. This is the first four stroke bike which will be launched in this segment.

Top level company sources said that Hero Honda is investing Rs 100 crore in 1998-99. The company is planning to raise an external commercial borrowing (ECB) worth Rs 30 crore, while the balance amount will be funded by internal accruals. The company has already raised ECBs worth Rs 90 crore last year, which was invested for setting up the Gurgaon plant.

Sources added that the cost of the new model is Rs 30 crore, while Rs 70 crore will be spent on expansion of the company's two plants located at Dharuhera and Gurgaon in Haryana. The company is planning to achieve an installed capacity of 5.5 lakh units by 1999-end. It will manufacture five lakh vehicles next year (1998-99). Hero Honda will close this year with 4.02 two-wheelers and next year with 4.5 lakh units.

The proposed motorbike will meet the 2000 emission norms and will be more fuel efficient. The company will offer customers the option of a self- starter facility, sources stated. Another unique feature is that it would be fitted with disc brakes. It will be manufactured at the company's new plant at Gurgaon. Most of the two- wheeler companies are now concentrating on motor cycles as it is the only sector which is looking up amidst the recession in the automobile industry. Escorts Yamaha and Bajaj Auto are also planning to enter the four stroke segment. Escorts Yamaha Motor Limited has plans to launch a 125 cc four stroke bike which will roll out in mid-1998.

Bajaj Auto is also finalising plans to launch a 110 cc four stroke bike code name BR181 in April and a 125 cc motorcycle powered with a two stroke engine during the course of the next financial year.

Hero Honda's proposed bike has an import content of about 19 per cent. The rest of the components are sourced from its 16 ancillaries including Munjal Showa. At present, the company has five two wheelers under its stable, each powered with a 100 cc engine. The company launched `Street 100,' model earlier this year.

Hero Honda recorded a 100 per cent growth in its net profit in the first half of the current fiscal over the corresponding period in 1996-97. The company's turnover also increased to Rs 540 crore for the first six months ended September 30, as against Rs 357 crore recorded in the corresponding period the previous year.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.