The Hindu Business Line : HM to boost production line at Chennai with Cedia model

HINDUSTAN Motors Ltd will strengthen the production line at its car plant in Chennai with the introduction of a new Mitsubishi model Cedia early next year.

Some completely built models from Mitsubishi would also be sold through the company's existing dealership network, Mr C.K. Birla, Chairman of HM, told shareholders at the 63rd annual general meeting of the company that was held here today.

Mr Birla said HM had already launched the new Pajero 2.8. On the anvil were new Mitsubishi models as well as the New Amby Grand that would incorporate electronic features. He hoped that with the new business initiatives that were being taken, the company would record operational profits in the fiscal 2006-07. In this regard, he mentioned that the sale of Ambassador cars had registered a seven per cent rise in April-September 2005 compared with the corresponding period of 2004.

According to him, HM had divested its engine and transmission business and spun off its Power Unit Plant (PUP) at Pithampur and the Power Products Division at Hosur to a new company, AVTEC. The business restructuring had resulted in a profit of Rs 190.42 crore "before making provisions for prior period items as required under the existing accounting standards".

As part of its strategy to develop the auto component business at Uttarpara, HM has set up a components manufacturing facility with facilities such as a forging, foundry and press shop "which would be leveraged for catering to the component needs of the growing auto and allied industry in India and abroad", Mr Birla said.

The company had received a substantial amount of cash flow by disinvestments of business and by sale of share in AVTEC retaining its shareholding at 49 per cent. "In the process, the company has reduced its debt by Rs 192.50 crore," Mr Birla said.

He said the company had sought the State Government's permission to sell excess land at the Uttarpara factory and utilise the proceeds for business purposes. The relevant law in this regard has been enacted and the rules specific to sale of land under the provisions of the Industry Renewal Act were awaited. Following receipt of permission from the State Government in this regard, HM would sell the excess land at its Uttarpara plant.

During the 15 months ended June 30, 2005, HM recorded gross income of Rs 1,352.13 crore against Rs 858.88 crore in the 12 months ended March 31, 2004.

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