HM scouts for new auto contract manufacturing biz

Hindustan Motors Ltd is in talks with overseas automakers for contract manufacturing at its Chennai plant, which is currently operating at sub-optimal capacity.

"During 2009-10, we manufactured 4,000 units from the plant, and we would ideally like to utilise the idle capacity," managing director Manoj Jha said.

"We are now in discussions with Mitsubishi on how much they intend to utilise so that the remaining could be utilised for contract manufacturing with some other firms," he said.
    
A decision was expected to be taken in the next six months, the Kolkata-based company said.
    
The main idea of roping in another car-maker for contract manufacturing was to improve capacity utilisation at the Chennai plant having an installed capacity of 25,000 units per annum.
     
"Mitsubishi has said that they would not have any objections, if we rope in another company," Jha added.
     
Hindustan Motors' factory in Chennai makes Mitsubishi's Lancer sedans and Pajero utility vehicles.
     
Hindustan Motors, the maker of the Ambassador car, has been struggling with losses, plans to launch new models and variants, revamp capacity and sell off properties.
    
Recently it has raised Rs 40 crore through sale of assets and would be spending Rs 25-30 crore during FY 11 to ravamp its capacity across plants, he said.
    
HM was planning to launch 7-8 new variants of its existing models over the next 12-15 months, he said.
   
"There would be new variants of the Ambassador-based on a completely new engine platform. We will start rolling out these new variants from January 2011," Jha said.
   
The company that sells 800 Ambassadors a month, has also roped in a 'global leader' to develop the new engine, he added.