New Delhi, Sept. 9: Officials from Suzuki Motor Corp, Japan's third-largest motorcycle maker, will hold meetings with engineering firms next week to set up a two-wheeler manufacturing unit in Haryana.

Suzuki, which holds a 54 per cent stake in Maruti Udyog Ltd, plans to locate the factory either in Gurgaon, where its auto plant is situated, or at Manesar, where Honda's two-wheeler production facilities are located.

“The Japanese team will discuss technical aspects, including structural, mechanical and engineering design of the factory,” sources said.

The factory, to be built at an estimated cost of Rs 50 crore, will commence production from next year since an agreement with former joint venture partner, TVS Motors, binds Suzuki from selling its own motorcycle till then.

Earlier in 2001, Suzuki had sold its entire 25.97 per cent stake to the TVS group.

“We are preparing a tender document which will be ready by the end of this week,” an official said, adding that Tata Consultancy Engineers was facilitating the process.

The Japanese automaker had earlier obtained government permission for production of two-wheelers and three-wheelers. It has also acquired a majority stake in Integra Overseas Private Ltd for two-wheeler operations.

The shareholding would be subsequently increased and the name changed to Suzuki Motor India, officials said.

Analysts said the automaker would face tough competition from market leader Hero Honda Motors Ltd, second-ranked Bajaj Auto Ltd and former partner TVS Motors.

Currently, eight firms make over 40 models in the country that jostle for buyer attention in the price-sensitive market. Motorcycle sales jumped 30.16 per cent in 2002-03 helped by new model launches, lower prices, low interest rates and a shift in buyer preference to motorcycles from scooters, against 36.83 per cent in the previous year.