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HM in talks with Volkswagen, Peugeot for component supplies

Our Bureau

New Delhi , June 15

HINDUSTAN Motors said on Wednesday it was in talks with players such as Volkswagen and Peugeot to supply components from its Uttarpara plant.

"We are in initial talks to supply (body) panels to Volkswagen and forgings/casting components to Peugeot. We are also talking to Mitsubishi for supply of components," Mr Ashwani Dubey, Executive Vice-President, Hindustan Motors, said at a press conference to announce the launch of the CNG BS III Ambassador Grand (costing Rs 4 lakh).

The company is targeting to increase the outsourcing of its components business from the Uttarpara unit in West Bengal to over Rs 300 crore in three years.

"Components outsourcing from Uttarpara should generate revenues of about Rs 5 crore per month. Outsourcing from the unit generated revenues of about Rs 25 crore in the last fiscal. The total figure would be much larger as components worth around Rs 150 crore were supplied for internal consumption last year," Mr Dubey said.

Currently, the Uttarpara unit accounts for 40 per cent of the company's sales. Meanwhile, despite stiff competition in the market, the company has set growth targets for its old warhorse Ambassador and expects sales to increase by about 50 per cent over the next three years to 18,000 units a year.Sales of the Ambassador grew four per cent last fiscal to about 12,600 units, with nearly 1,000 units coming from personal use segment, Mr Dubey said.

In the days ahead, Hindustan Motors expects to sell about 150 units per month on the personal use segment, even as the bulk of sales would continue to come from the institutional segment.

"We have got orders for 200 cars from the Government and the Army has ordered 400 units," Mr Dubey said, adding the company expected to sell 1,400 units this month.

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