The Hindu Business Line : HM to loan excess capacity at its Chennai facility

HINDUSTAN Motors plans to let out excess capacity at its Chennai plant to other car makers while it has pruned the number of Lancer variants to three from five.

The Vice-President for automobile division, Hindustan Motors, Mr G. Shyam Sundar, told Business Line that only 60 per cent of the Chennai plant where Mitsubishi Lancer is manufactured, is utilised while the rest remains idle. "We are in talks with some car manufacturers though nothing has been finalised so far," Mr Shyam Sundar said. The current capacity of the Chennai plant is around 12,000.

The company has, meanwhile, stopped the import of sports utility vehicle Pajero as the latest variant of the model launched worldwide recently, the Pajero 04, is set for launch in India soon. It has sold all the 75 units of Pajero, it had imported as a CBU.

Mr Shyam Sundar said as the company has chosen to stick to the mid-sized premium category, it does not need more capacity. Hence it wants to get into contract manufacturing so that it can earn some revenues out of the idle capacity.

The company has manufactured 35,000 Lancer cars from its plant in Chennai during the last five years and has achieved 70 per cent localisation. The current market share for Lancer in its segment is around 20 per cent. The company wants to focus more on performance of the car and hence will make necessary changes in the model to optimise the performance.

My Shyam Sundar said it has also pruned the number of Lancer variants to three from five to avoid confusion in the market. The three variants are GL, GLX and LE, the luxury variant of Lancer. The technical tie-up with Mitsubishi for manufacturing lancer runs up to September 2005 while for Pajero it is up to 2010.

Hindustan Motors, largely known for manufacturing Ambassador cars, has three plants in the country. The Tiruvallur plant near Chennai manufactures Lancers. The Uttarpara plant near Kolkata is engaged in the manufacture of passenger cars such as Ambassadors, Contessa and multi utility vehicles such as Trekker, Porter and Pushpak.

The Pithampur plant near Indore manufactures fuel-efficient engines and transmissions based on technology from Isuzu Motors and Mitsubishi Motors, Japan. This plant also houses the road trusted vehicle division, manufacturing the "RTV" brand of multi utility vehicles, in technical collaboration with OKA Motor Company, Australia. The Hosur plant near Bangalore produces transmissions for heavy-duty vehicles.

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