Financial Daily from THE HINDU group of publications
Saturday, Apr 20, 2002
Regulatory Bodies & Rulings
Industry & Economy - Automobiles
Government - Policy
Auto cos get FIPB green signal for new models
NEW DELHI, April 19
THE Foreign Investment Promotion Board (FIPB) has given a slew of approvals for international automobile majors such as Toyota, Honda and Hyundai and homegrown Hindustan Motors to expand their operations and introduce more models.
Hindustan Motors Ltd has secured FIPB clearance for launching its `Lancer' with a more powerful and compact 1.8-litre engine provided by its technical collaborator, Japan's Mitsubishi Motors Corp. Hindustan Motors had sought to pay a lumpsum technical know-how fee of 12.70 million yen to its Japanese partner and five per cent as royalty payment for parts and components that do not form part of their technical pact.
In its application, Hindustan Motors' wanted to pay about 40 million yen to Mitsubishi as technical know-how for the Pajero utility vehicle and also the royalty on spare parts used. The C.K. Birla-promoted erstwhile car market leader has been in talks with Mitsubishi to import and sell the Pajero in India and possibly later manufacture here, should the demand pick up.
Hyundai Motor India Ltd, the fully owned subsidiary of South Korean Hyundai Motor Corp, has also received approval for its "omnibus plan'' to seek a one-time permission for a whole range of vehicles.
The permission has been granted for vehicles including the Elantra, Tuscani, Tiburon, Lavita, Matrix, Trajet, Santa Fe, Terracan, Grandeur XG, Getz and Carens and various engine options in them. A Hyundai spokesman said that the approval does not mean that the company is immediately planning to bring the entire vehicles into India. "The approval is only a facilitation to do some testing here and then take it up from there,'' he said.
Hyundai in its application had stated that the annual turnover of the import of completely built units will be within 10-15 per cent of the company's total annual turnover. Hyundai currently makes the Santro small car, the Accent sedan and the Sonata luxury car from a factory near Chennai.
Toyota Kirloskar Motor, a subsidiary of Japan's Toyota Motor Co, has been granted approval to launch a new variant of its hugely successful multi utility vehicle, the Qualis. The new product, `571 N Qualis' is tentatively scheduled to be launched in the market during September-October 2002 and will be manufactured at the Bidadi manufacturing plant in Karnataka. Payment of technical assistance fee and royalty to the Japanese company for this new product has also been approved, the sources said.
Honda Siel Cars, where Japan's Honda Motor Co holds 99 per cent foreign equity, was granted approval to import in bulk quantity spare parts required for individually imported Honda cars in India. The company wanted to import these spare parts, as part of its philosophy of servicing even individually imported cars, from its parent in Japan and from Thailand.
Honda, which makes the City and Accord cars here, gave the Government an undertaking that at no stage, it will undertake any retailing activity of the imported spare parts.
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