Hindustan Motors - famous for keeping the 1950s Morris Oxford in production as the Ambassador - expects to turn profitable by end of the current fiscal year and will not be referring to India's Board for Industrial and Financial Reconstruction (BIFR), a top official said.

"We are not referring to BIFR. We have the necessary means to turn this company around by the end of this financial year," chairman CK Birla told shareholders during the company's annual general meeting, Reuters reported.

The Ambassador, updated and re-engined since Hindustan acquired the tooling from England decades ago, remains popular with government officials for its sturdy build and ample seating but Hindustan, which also imports, assembles and distributes Mitsubishi vehicles, reported a loss in 2009/10 and is scheduled to approach the BIFR as its net worth has eroded by more than half.

In a bid to turn the corner, the country's oldest car maker plans to launch new models and variants, revise capacity and sell off properties, the report said.

"Adequate steps are being taken and the company should start making profits by the end of FY11. We are seeing increased demand for our products across the country," Birla said. The Kolkata-based car maker is planning to sell a property in Chennai, adjacent to its plant, he added.

"Over the last two years we have garnered INR2.75bn US$59.3m through sales of assets and properties and this Chennai building is the last one we are selling," Birla added, without giving further details of the transaction.

The firm also plans to assemble new Mitsubishi models at the Chennai plant, he added.

The factory currently assembled Lancer sedans and Pajero [Shogun] SUVs.

Currently the company sells 5,000 Mitsubishi vehicles annually but has capacity for 24,000 units.

The company is also planning to launch a new version of the Ambassador in August 2011, managing director Manoj Jha told Reuters.

"It will be a holistic make-over of the Ambassador with sub-two litre engine. We will be placing the product as an entry-level sedan," he said.

The company is increasing its annual capacity at its Uttarpara plant in West Bengal from 10,000 units to 15,000 units, he said.

Hindustan Motors is also set to introduce a new diesel and alternate fuel powered mini truck called the Winner nationwide, he added.

"In the last two years Winner, a one-tonne passenger vehicle, was launched on a pilot basis in the selected locations. Now we [will launch] it across the country," Jha said.

Consequently the company is also increasing capacity in the Indore and West Bengal plants to 1,000 units a month, he said.

The company narrowed its April-June first fiscal quarter loss to INR197.3m ($4.26m) from INR218.1m earlier. Net sales improved to INR1.5bn from INR1.2bn a year ago.