Kolkata, Hindustan Motors Ltd (HM) is bullish about the prospects of its auto components business.
The company, which has earmarked an investment of Rs 75 crore in this segment over the next two years, hopes to cater to the growing demand for auto components in the domestic market as well as in the US and Europe.
Within the next six months the company will also launch a premium range SUV from the Mitsubishi stable in the Rs 15-25 lakh price range. In the months ahead, the company will also focus on offering services pertaining to engineering design for auto components.
Speaking to newspersons after the 65th annual general meeting of the company here on Monday, its Chairman, Mr C.K. Birla, said that following the Rs 294-crore property deal at Uttarpara, the company was ramping up its auto components business there.
Focus on ramp-up
While the two-month strike between March and May this year was a “slight setback”, the focus now was to ramp-up the company’s auto components business rapidly. “We will not only meet the growing demand for auto components in the country but also from markets in the US and Europe,” he said.
Earlier in February this year, HM had entered into an arrangement with Shriram Properties Ltd of Bangalore for the development of an integrated IT township and an auto park on 314 acres of land specifically identified for the purpose at Uttarpara, and in accordance with the conditions laid down by the West Bengal government in its approval order dated September 13, 2006.
As compensation, HM will receive Rs 294 crore in five tranches.
The proceeds would be used to make investments in the company’s auto components business and in the upgradation of the Uttarpara plant. Part of the proceeds may also be used to retire some debts of the company, which currently stand at Rs 112 crore.
Sale slab
Mr Birla said the company sold 13,775 vehicles in 2006-07.
This included 10,100 Ambassadors. Sales of the Mitsubishi range of products also grew in the last fiscal, with a marked increase in the sales of premium SUVs, the Pajero and the Montero.
In 2006-07, HM recorded gross sales of Rs 806.37 crore compared with Rs 553.05 crore recorded during the nine-month period ended March 31, 2006.
The company has posted a net profit of Rs 13.30 crore in 2006-07 against a loss of Rs 43.69 crore in the nine months ended March 31, 2006.
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