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Hindustan Motors set to launch new passenger car in October

Hindustan Motors set to launch new passenger car in October
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First Published: Wed, Jun 11 2008. 12 28 AM IST
Updated: Wed, Jun 11 2008. 12 28 AM IST
Kolkata: Hindustan Motors Ltd (HM), which manufactures the Ambassador car and Japanese automobile major Mitsubishi Motors Corp.’s vehicles in India, is set to launch a new passenger car in October—its first entirely new car since the Contessa, which was launched in the early 1980s and officially withdrawn in 2003.
“The company has, on its own, developed a new platform for the car. Though we have taken some technical inputs from others, the design is entirely our own,” said R. Santhanam, managing director of HM, in Kolkata on Tuesday. The car, he added, would be manufactured at HM’s factory at Uttarpara in West Bengal, and launched in October.
Declining sales of the Ambassador, India’s longest surviving passenger car, led to the decision to launch a new car after around 25 years, HM said. Though HM claims it still sells around 12,000 Ambassadors a year, most of them are bought by taxi-operators and governments.
“To cope with competition, we have to launch new products. We have been planning this (launch) for quite some time,” Santhanam said. But asked about the specifications of the new car, he said, the company wasn’t ready to announce anything.
The prototype of the car is ready and has been tested extensively at the Uttarpara factory. “It has now been sent for mandatory tests...,” said an HM official who spoke on condition of anonymity.
In August 2006, HM had said it was preparing a comprehensive plan to revive the Uttarpara factory, its oldest manufacturing base, which is about 60 years old. Santhanam had then said HM was looking to expand its product range but did not reveal details.
The proposed car could give HM’s Uttarpara factory, which employs around 4,500 people, a new lease of life. Though spread over 743 acres, the only vehicle manufactured at the factory currently is the Ambassador. The factory’s installed capacity is 25,000 vehicles, but produces only 12,000 Ambassadors a year.
In February last year, HM announced it would transfer 314 acres at it Uttarpara factory to a joint venture with the Shriram group of Bangalore and a develop an integrated township for information technology companies. HM earned Rs295 crore from the deal, which is being paid in five tranches over two-and-a-half years. Over the past 10 years, HM’s factory at Thiruvallur near Chennai has emerged as the most important manufacturing base for the company. Starting with the Lancer in 1998, the Thiruvallur factory is currently the sole manufacturing base for Mitsubishi’s vehicles in India.
HM posted a net profit of Rs38 crore on a turnover of Rs681.55 crore in the year that ended in March. Its shares closed marginally lower at Rs26.70 on the National Stock Exchange, or NSE, on Tuesday, while the bourse’s blue chip index, the S&P CNX Nifty, fell 1% to 4,450.
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First Published: Wed, Jun 11 2008. 12 28 AM IST
More Topics: Hindustan Motors | Auto sector | Car | Uttarpara | Taxi |