The company's exports had dropped to 4,371 vehicles in the first half against 6,686 two wheelers it had exported during the same period last year, according to the Association of Indian Automobile Manufacturers (AIAM).

``The fall in exports is mainly due to the devaluation of Japanese currency yen, which resulted in increased price of our products. Besides, many of our competitors slashed their prices during the period, offering stiff competition,'' company sources told PTI here.

Hero Honda, country's largest seller of mobikes with a market share of over 38 per cent, is currently implementing a new package to prop up exports, which include reduction of prices, the sources said.

Promoted by the Munjals, company has decided to stress its best selling mobike in domestic market `splendour'ahead of the `sleek' model for capturing a better exports share.

``Sleek, despite its dismal sales in the country, has been our best selling model in overseas markets. But as per our new marketing strategy, we would now be promoting `splendour' model abroad,'' the sources said.

The sources said another step to boost exports was setting up Hero Honda's own servicing network in countries where the company had an export market.

``We would set up our automated service stations in countries like Bangladesh and Sri Lanka, where our bikes have good demand. This, coupled with right product mix and lesser prices should help us regain our export markets in just two months,'' they said.

Exports accounted for about six to seven per cent of the company's turnover, which stood at Rs 713.11 crore in the first half of the current fiscal.

Hero Honda, which is currently exporting to Asian and Latin American countries like Peru and Argentina, was hopeful of exporting over 18,000 bikes this year.

Meanwhile, thecompany is going ahead with its plans to introduce two new models in 2000 and 2001, the sources said, adding that a new 150 cc bike would be launched early next year.

The sources said the company would invest Rs 100 crore in its manufacturing plants to enhance the production capacity to five lakh units in this financial year itself.