The Hindu Business Line : HM eyeing small car segment

Growth drive
The Icar is a 600cc, 12-valve, 3-cylinder car with a 4-speed auto gearbox.
Ideally suited for the Indian A2 segment, comprising the Alto, and Maruti 800.

THE MITSUBISHI ICAR

Mumbai , July 29

Hindustan Motors is eyeing the small car segment. It is learnt that the company plans to launch the `Mitsubishi Icar' in India by end of 2007.

The plan, according to company sources, is to introduce the new model through the SKD (semi-knocked down) route whereby the new vehicle will be assembled at the company's plant at Tiruvallur, in Tamil Nadu.

HM has been making Mitsubishi brand of cars (Lancer) since 1998 under a tie-up with Mitsubishi Motor Corporation, Japan.

Sources said the company would be expanding its existing manufacturing facility at Tiruvallur to assemble the new car.

Currently the facility has an annual production capacity of 25,000 units.

When contacted, a company spokesperson said she had no idea of the development, but a senior official confirmed that the company is examining the possibility of launching Icar in India.

Ideal for Indian segment

The Icar is a 600cc, 12-valve, 3-cylinder car with a 4-speed auto gearbox.

With its engine size (600cc), the car is ideally suited for the Indian A2 segment, comprising the Alto, and Maruti 800, but the technology and interiors in the car are similar to that of a mid-size sedan.

The Icar is currently available only in Japan, though there are feasibility studies being carried out in the UK.

According to official Web site of Mitsubishi UK if the study is feasible, the model would be introduced at £8,999 (Rs 7.81 lakh) in the UK market.

Indigenisation

As a price indicator of the variant that may be launched in the UK, Rs 7.81 lakh is a steep price for the Indian market. Through the SKD route and indigenisation, the price may be further brought down.

Industry analysts said HM may think of manufacturing the engine at its Pithampur, (Indore) facility.

The facility is currently manufacturing engines for General Motors India and Ford India, besides its own set of Isuzu engines.

Japan tax model

In Japan, there are various tax rates for cars of different engine displacements. In fact, cars with 800-cc engine displacement and below have the lowest tax rates. In India, the last Budget (2006) indicated a similar move with excise duty being reduced to 16 per cent for cars with 1,200 cc and lower petrol engines, and 1,400 cc for diesel engines. Further, there are talks in the industry that Tata Motors has asked the Union Government for special tax sops on the one-lakh car (700-cc car) project.