The Hindu Business Line : Chinese firm gets FIPB nod for motorcycle engines plant

IT'S now official. The Chinese dragon is finally all set to get a toehold in the Indian two-wheeler market. After several rejections, the largest private sector motorcycle manufacturer in China, Chongqing Lifan Industry (Group) Company Ltd, has received the Government's permission to manufacture motorcycle engines in the country.

Initially, the company had sought permission for a wide range of activities. It included assembly, manufacture, commissioning and maintenance of motorcycle engines, motorboats, scooters, automobiles, automobile engines, petrol/diesel/LPG/CNG engines, generators, water pumps, lawn mowers, tractors, electrical bikes, non-land vehicles and its engines, as well as carrying out R&D activities.

And, for carrying out this entire gamut of hi-tech activities, the company had proposed to set up a wholly owned subsidiary in India with an investment of Rs 12 crore.

The Government, sources said, had then found the proposal unfeasible, because such a wide range of activities could not be done with such a small investment.

The Ministry of Heavy Industries, the administrative Ministry for the automobile sector, was of the view that the company's plan "appeared to be for screw-driving operations and trading which is not a desirable activity." Following this, the proposal was rejected.

Following the rejection, the company again came up with a modified plan and said that it would invest Rs 12 crore for manufacturing motorcycle engines only in India and not carry out the other activities that it had proposed earlier.

With the change in the company's plan, the Government has finally given the go-ahead to the company for setting up its plant at Pune in Maharashtra.

However, though a section of officials in the Ministry of Heavy Industries are still not clear as to how a motorcycle engine manufacturing unit could be set up with such a small investment, the proposal was okayed by the Foreign Investment Promotion Board (FIPB) because the Ministry of External Affairs opined that they "have no objection from the political angle," sources said.

The Lifan group, currently, has an annual capacity of two million motorcycle engines and one million motorcycles.

At the end of 2003, the company possessed a total of 848 Chinese and overseas patents and 188 copyrights. It has 112 registered trademarks in China and 32 registered trademarks outside China and also ranks first in the Chinese motorcycle industry in respect of self-owned intellectual property rights.

The company's products are currently sold in over 70 countries covering South-East Asia, West Asia, Europe, Africa and South America. It was also the first Chinese motorcycle company to export motorcycles to Japan.

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