Mumbai: General Motors, the world's biggest car maker, will invest Rs1,250 crore ($267.5 million) to set up an export-oriented, greenfield production unit in Maharashtra. This will be GM's second production facility in the country after its Halol unit in Gujarat.

This is also the biggest investment in the auto sector in the state.

The factory, to be located in Talegaon, near Pune, would have a capacity of more than 100,000 units and would involve an overall investment of about Rs2,000-2,200 crore ($428-$471 million), industry sources said.

The company will sign an agreement with Maharashtra Industrial Development Corporation for setting up the new unit. MIDC would provide infrastructure support by setting up a container hub near Talegaon to facilitate its export activities.

The state government has already announced the setting up of a 1000 MW- power plant near Talegaon, to fuel industrial growth in the area. Last year, the state government had initiated a unique auto cluster in the industrial town of Pimpri-Chinchwad to strengthen the manufacturing activities there.

GM, meanwhile, is increasing production capacity at its Halol plant to 85,000 units from the current 60,000, GM also plans to launch the Chevrolet Spark in India in the first half of 2007.

The company has invested about Rs1,400 crore ($299.6 million) in India so far.

GM which makes the Chevrolet Aveo sedan, the Chevrolet Tavera multi-utility, the Optra sedan, the Corsa and Corsa Sail in India, expects to sell 50,000 units in 2006.

India's passenger vehicle market is forecast to nearly double to two million units by 2010. Small cars dominate the market, with companies like Suzuki Motor's Indian arm Maruti Udyog, South Korea's Hyundai Motor Co and domestic auto major and the country's third-biggest car maker Tata Motors taking a major share of it.