India's largest motorcycle maker, Hero Honda Motors Ltd, launched its cheapest 100 cc motorbike yet on Wednesday, hoping to blunt competition from main rival Bajaj Auto Ltd.

The motorbike maker, in which India's Munjal family and Japan's Honda Motor Co each hold 26 per cent stakes, said the new model, CD-Dawn, would carry a showroom price of Rs 31,899 in Delhi.

The company expects to sell 7,000-8,000 units of the bike in April and hopes sales will climb to 20,000 a month in six months.

Hero Honda, which has a dominant 45 per cent share of the domestic market, has faced slowing demand and cutthroat competition after two consecutive years of over 30 per cent growth in the world's biggest motorcycle market.

But the firm has forecast at least 10 per cent growth in sales volume in the current financial year to March 2004. Its sales in the past year to March grew 17.7 per cent to 1.68 million bikes.