Chinese commercial vehicle maker, Beiqi Foton Motor, will source engines from Cummins' Pune factory for its Indian manufacturing facility, to be set up in Pune by 2013.

The plant will have an installed capacity of 100,000 units annually.

Cummins India is already providing engines to Beiqi Foton's Chinese factories and the automaker reportedly prefers to source engines for India from Pune-based Cummins as well.

Maharashtra Industrial Development Corporation (MIDC) confirmed to just-auto Beiqi Foton was looking for land near Pune for the proposed factory and was expected to be allotted 250-300 acres in the Chaken auto hub within two months.

Beiqi Foton has signed a MOU with the Maharashtra government to invest INR1,676 crore (about US$450m) in a factory to make light, medium and heavy commercial vehicles for sale in India.

Beiqi Foton Motor has 14 plants in China and JVs and partnerships with Cummins and Daimler Trucks.

Cummins India makes diesel and natural gas engines for power generation, industrial and automotive sectors.

Recent media reports said Beiqi Foton Motor plans to conduct a private placement with 10 investors (including Beiqi Group and a number of mutual funds) to raise up to CNY5bn to upgrade its vehicles and to inject capital into Chinese JV Beijing Foton Cummins Engine.