Yamaha has announced that it is 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 developed at Yamaha’s research center in the state of Uttar Pradesh, but the company hasn’t given a launch date.

"Developing the product in India will give us substantial cost advantage and enable us to price it competitively," said Hiroyuki Suzuki, chief executive of India Yamaha Motor.

The bike will be sold first in India and then exported to Latin America, Africa and China.

"Our target is to develop the cheapest bike at around $500 for both India and export markets," said Toshikazu Kobayashi, senior Yamaha research and development manager.

Yamaha currently produces 400,000 units in India, with a target of one million by 2014.