HM in talks to supply parts to Volkswagen

C K Birla group company Hindustan Motors Ltd (HM) today said that it was in talks with German car major Volkswagen for supplying components such as body panels form its Uttarpara facility in West Bengal.

In its quest to emerge as a major player in the automobile component business, HM is also in talks with French car maker Peugeot, said Ashwini Dubey, executive vice-president of HM. Company officials said talks were in early stages and refused to divulge details.

HM expects the size of the component business to grow to around Rs 300 crore in three years against Rs 65 crore last fiscal (which is less than 10 per cent of the company's turnover today).

HM is already supplying critical engine components to global car majors such as General Motors and Ford from its Pithampur plant near Indore.

Recently Japanese automobile company Mitsubishi Motors Corp had announced that it will be expanding its tie-up with HM, which may also involve outsourcing of components.

The HM currently makes Mitsubishi's sedan Lancer from its Chennai plant. HM also sells Mitsubishi's SUV, Pajero in the Indian market. Post January 2006, Mitsubishi is planning to roll out new models in India, through HM. It is also learnt that HM may import Mitsubishi's minivan Grandis for the Indian roads.

With the sales of its erstwhile bread and butter model, Ambassador not keeping in pace with contemporary models from competition, the company is keen to beef up its operations in fast growing segments like automobile components.

vbHM officials however reiterated their confidence in the country's oldest surviving model, the Amby, and said that new versions of the car with additional features would possibly be launched before the Diwali season begins this year.

Last year HM had sold around 12,500 units of the Amby and recorded a measly 4 per cent growth over sales in 2003-04. HM today launched the 1.5 litre CNG, 1.8 litre CNG with the Isuzu engine and the 1.8 litre Grand CNG, in the capital today.

Priced between Rs 3.8 lakh and Rs 4.8 lakh, the new models are primarily targeted at the commercial and government segment, though company officials did not rule out the demand in the private-use segment too picking up for these models.

The CNG versions have been positioned as a value for money and the company claimed operating economy of Rs 1.20 per km for the CNG Bharat Stage-III versions.