The Hindu Business Line : MLR Motors expects to display demo car at auto expo

Hyderabad, April 28 Admitting to a delay in project implementation, MLR Motors maintains it is making all out efforts to showcase a prototype of its small car at the New Delhi auto show next year.

The company claimed that all the designs are ready and it has tied up for engines with European firms.

The Chairman of the Hyderabad-based MLR Motors, Mr M. Lokeswara Rao, said closing funds for the greenfield project has been a challenge in the current market conditions, especially where automotive sector is faced with troubles and falling sales.

“We are in discussions with banks and financial institutions and private equity players to close funding for the first phase of the car project, which entails investment of about Rs 1,250 crore,” Mr Rao told Business Line.

“Typically, development of a car takes five-six years and MLR has made significant progress since we announced our intention to set up a car manufacturing base.

“The designs have been firmed up after restyling; work on the engines is underway in Europe and a prototype will be ready soon,” he said.

The company is simultaneously working on petrol and diesel variants of hatchback.

Designers are in the process of fine tuning the engine specifications for both the variants, the latter is to be sourced from a French major, he said.

Refraining from giving further details on where MLR Motors expects to source the engine from, Mr Rao said “work is now underway to synchronise the engine with the body design.”

Project inadequacies

“Though the Andhra Pradesh Government has allotted land for the project, the infrastructure is woefully inadequate.

“There is no power and other related issues need to be addressed,” he said.

With regard to finances, Mr Rao said that of the Rs 1,250 crore, MLR expects to bring in about Rs 450 crore in the form of equity and the rest would be through debt led by domestic financial institutions.

Efforts are on to close a private equity fund infusion into the project.

Alongside, the work on light commercial vehicle is underway. MLR expects to roll out the LCV few months ahead of the car.

Both of these would be in 2010, he hinted.

“I have put all my years of experience and savings as an individual and of the family into the car project.

“About 50 per cent of shares have been pledged. While there could be concerns about delay, you will soon hear about project developments. After the elections, MLR will showcase designs,” he said.

More Stories on : Cars | Events | Andhra Pradesh

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page