Japanese two-wheeler maker, Yamaha has said that it is planning to invest a about Rs 1,500 crore over the next five years for setting up a new plant in the southern state of Tamil Nadu in India.

India Yamaha Motor (IYM), the company's wholly owned subsidiary, will begin production in the new production facility in 2014. The plant, which will be located at the industrial park in Vallam Vadagal near Chennai, will have an initial capacity to build 4 lakh units and will be expanded to 18 lakh units by 2018.

"India Yamaha Motor signed a Memorandum of Understanding with the government of Tamil Nadu today approving the construction and operation of a new two-wheeler factory in the state," Yamaha said in a statement.

The construction is about to begin on the plant in September 2012, the statement said. It also said that the forecast investment in the plant would be around Rs 1,500 crore. The new plant will initially employ around 1,800 people.

The company had announced plans earlier to set up a facility to make the country an independent export unit for selling its vehicles in international markets including in Latin America and Africa.