The Hindu Business Line : Leasing out spare capacity — Hind Motors in talks for contract production

AUTOMOBILE manufacturer Hindustan Motors has said that it is in talks with five foreign companies, including BMW and Volkswagen, to lease out spare capacity at its Chennai plant, where the Mitsubishi Lancer is being made.

"We have spare capacity at our Chennai plant and are in talks to commence contract manufacturing. We are speaking to the Malaysia-based Proton, BMW and Volkswagen among other players for a tie-up to assemble cars in the mid-size segment," said Mr G Shyamsundar, Vice-President, Hindustan Motors.

The company's Chennai plant, which has a total capacity of 12,000 units per annum, has about 40 per cent unused capacity. "We would provide about 6,000-6,500 units capacity for contract manufacturing," Mr Shyamsundar said.

He added that such a tie-up would have no bearing on Hindustan Motors' relationship with its technical partner, Mitsubishi. With the Chennai plant currently running at a loss, a contract manufacturing tie-up would help the plant inch towards profitability.

Hindustan Motors is also working on launching more models from Mitsubishi's stable in India in the next fiscal. This would include new launches in the D-segment (premium mid-size segment) in the form of either the Magna or the Airtrek. The company will also launch the 2004 version of the Mitsubishi Pajero by mid-2004.

Meanwhile, Hindustan Motors has announced the launch of new variants of the Mitsubishi Lancer, the Lancer INVEX. The car, which is available in two variants priced at Rs 8.99 lakh and Rs 9.95 lakh, comes with a new 1.8 litre engine. The INVEX is equipped with the INVECS (intelligent and innovative electronic control system) technology, which allows the driver to choose between the manual and the automatic mode.

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