Hindustan Motors will sell Proton in India
09 September 1999
Hindustan Motors, the C.K. Birla group company that makes the Ambassador and Mitsubishi cars in India, wants to introduce Malaysia''s leading car Proton to India. It plans to assemble the car in India with parts imported from Perusahaan Otomobil Nasional, Malaysia''s national car company, which makes the Proton. Hindustan Motors is signing a memorandum of understanding with the Malaysian company for this purpose.
Proton is keen on the alliance. The announcement about the MoU was made by the company in Kuala Lumpur on 8 September.
Hindustan Motors is also in talks with Mitsubishi Motor Corporation of Japan for a strategic marketing alliance to introduce the Pajero sports utility vehicle in India. These two initiatives form part of the company''s revised business plan aimed at overcoming the recession in the automobile market.
C.K. Birla, chairman of the company, revealed that the company is refocusing largely on rural and semi-urban markets. It plans to revamp and expand its dealership in these areas for its existing products and the newly-introduced rural transport vehicle. Besides, it has just completed a major quality upgradation programme to strengthen the Ambassador cars and the Trekker range of vehicles. The Trekker will get a new gearbox and have a new body.
Hindustan Motors makes 2,000 Ambassador and 800 Lancer cars a month and sells all of them. Although the Ambassador has lost much of its market share, the company claims it has patrons in south India, especially in Chennai, Bangalore and Hyderabad.
Mr Birla expects that the Lancer car project will become profitable once the company is able to achieve a 50 to 55 per cent indigenisation level. At present, the vehicle has 40 per cent local content. Hindustan Motors recorded a turnover of Rs 1,229.73 crore, and posted a loss of Rs 28.17 crore after providing for depreciation of Rs 32.05 crore in the year ended March 1999.