Hindustan Motors To Roll Out Lancer Range By Jan 98

"Our aim is to have a minimum indigenisation of 40 per cent even in the first year of production," said R Santhanam, executive vice-president, Hindustan Motors, while talking to presspersons after the ground breaking ceremony at Thiruvallur yesterday.

In three years, the company intends to hike indigenisation levels to 80 per cent. The "flexible manufacturing facility for engine and transmission facilities at Indore allow for rapid indigenisation of these critical components even as the tough Japanese quality norms are maintained," he said.

The company decided on setting up its manufacturing facility at Thiruvallur because of the state's well-developed component base, skilled labour, port facilities and proximity to the crucial markets in the southern and western parts of the country.

 

These two regions combined account for about 63 per cent of the country's market.

Also, Hindustan Motors already has plenty of land readily available right next to its existing facility (for making earth-moving equipment) at Thiruvallur.

Estimated investment in the project is Rs 350 crore and the plant will have an initial installed capacity of 30,000 cars.

Modular expansion will take place as and when the market expands. Investment cost will be met from internal accruals, debt and equity, Santhanam said.

For Mitsubishi which is not taking any stake in the company for the time being, the Thiruvallur plant will be the fifth manufacturing base outside Japan in Asia.

The other four plants are located in Indonesia, Thailand, Philippines and Taiwan.

Even as construction work at the plant site goes on, the company will initiate the process of identifying potential vendors.

"A long list of suppliers has already been frozen and most others will be identified very soon," Santhanam said.

According to C K Rao, vice-president marketing, Hindustan Motors, although the exact price of the Lancer models are still to be finalised, it will be in the range of Rs 5 lakh to Rs 7 lakh.

This segment of the market is growing at approximately 30 per cent per annum, he said.

As part of the company's strategy to make its presence felt across the country, Hindustan Motors plans to have roadshows throughout the country in the next seven months to enable prospective customers to have a first-hand feel of the Lancer it plans to unveil.