HM hives of Mitsubishi plant in finance arm

Discussion in 'Indian Automotive Scene' started by Car Lover, Jan 28, 2013.

  1. Car Lover

    Car Lover New Member

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    Hindustan Motor, the makers of the Ambassador cars will hive off its Chennai car plant that produces Mitsubishi cars into a separate entity.

    HM is a licensee for Mitsubishi in India. The Chennai plant would be merged into a finance company owned by Hindustan Motors. The move would help both companies to pursue their growth plans, Economic Times reported, quoting a board approval for the split.

    Hindustan Motors makes the iconic Ambassador cars in multiple variants. It also makes Winner, light commercial trucks in Madhya Pradesh and also makes components for other car makers. The move will help Hindustan Motors to consolidate its products, including the Ambassador and pursue new avenues for its growth.

    Mitsubishi

    The split will allow Mitsubishi, the Japanese auto company that has negligble market share to expand in India. The Mitsubishi plant of HM produced the Lancer and Cedia luxury cars. But low sales forced the company to shut production of these luxury cars. The company had initially planned to bring the hatchback and sedan versions of Mirage, the car it had launched recently in Thailand. But it found the Indian car market hyper competitive and growth rates slowing.

    This year, car sales in India is expected to grow a record slow in nine years. The silver lining however is Sports Utility Vehicles.

    Mitsubishi SUVs in India
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    The company plans to stick to the low volume but high margin SUV segment that can be served effectively.Pajero sport and Outlander has had good sales in India and the company is focusing on this high growth market. SUV sales in India increased to over 400,000 units for the nine months to December, a growth of over 59% over the last year. In contrast, there was no growth in car sales during the same period.
     

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