Shares of Hindustan Motors (HM) jumped to the upper circuit filter of 20 per cent on the Bombay Stock Exchange (BSE) on reports that the company will possibly start assembling BMWs at its Chennai plant. The stock hit its 52-week high of Rs 8.10 amid a heavy volume of 6.17 lakh shares today.
The company is currently in talks with several high-end car manufacturers for contract manufacturing. Currently, Hindustan Motors produces the mid-sized car Lancer, analysts said. The current move is expected to help the company optimise idle capacities and hike revenues.
Currently, the Chennai plant has a capacity to manufacture 12,000 cars, but is expected to double that to 24,000 cars with the installation of the paint booth. However, the company says it will install the paint booth only if it manages a tie-up with another car manufacturer.
In January 2002, auto giant Ford Motor Co announced a strategic tie-up with Hindustan Motors to source the engine and transmission unit requirements for its Indian operations from Hindustan Motors. The gearbox and transmission units were to be manufactured at Hindustan Motors' Pithampur plant in Madhya Pradesh.
Recently, Hindustan Motors also launched its version of CNG engines - HM CNG Plus Engine. The product is aimed at CNG retrofit buses and gensets on CNG fuel mode. The new engine has been developed by Hindustan Motors' in-house R&D at its Uttarpara plant in West Bengal. The product was expected to be marketed from the last week of January 2002.
Hindustan Motors sees a huge potential in the CNG engine market as more and more states are opting for eco-friendly fuel options to tackle the increasing pollution menace. CNG is not only a cost-effective option but also a very economical fuel that is easier to maintain and is user-friendly. The engines project is in technical collaboration with a Canadian company, Green Gas Technologies, a pioneer in developing indigenous conversion systems utilising readily available kit parts.
Hindustan Motors, a CK Birla flagship, was incorporated in 1942, by setting up a car assembly plant at Okha Port, Gujarat. In 1948, it shifted its activity to Uttarpara, West Bengal, to manufacture cars and trucks. A division at Indore manufactures fuel-efficient engines and transmissions for cars in collaboration with Isuzu Motors, Japan.
