Japan's Yamaha said on Wednesday it was developing "the world's cheapest motorcycle" in India priced at $500, which it plans to export to other markets including China.
The low-cost bike with an engine size of around 100cc will be worked on at its research centre in Uttar Pradesh state, but the company declined to give a launch date.
"Developing the product in India will give us substantial cost advantage and enable us to price it competitively," Hiroyuki Suzuki, chief executive of India Yamaha Motor told reporters in New Delhi.
The bike will be sold first in India and then exported to Latin America, Africa and the "factory to the world" China -- usually the source of low-cost manufactured goods.
"Our target is to develop the cheapest bike at around $500 for both in India and export markets," said senior Yamaha research and development manager Toshikazu Kobayashi.
Analysts see Yamaha's move as part of a strategy to target commuters in India having previously focused on producing sporty and performance-led bikes.
Yamaha currently produces 400,000 units in India, with a target of one million by 2014.
But some analysts had doubts about a cheap bike meant for Chinese consumers.
"China already has cheap gas or electric-run bikes, often priced very cheap," analyst Mahantesh Sabarad of Fortune Equity Brokers said.
Rival Bajaj Auto has also introduced low-cost variants for export to other Asian countries, analysts said.
Sales in India's once-booming motorcycle market touched 10.08 million units in the fiscal year to March 2013, up just 0.12 percent year-on-year as low consumer spending and high-interest rates hit sales, industry data showed Wednesday.