Hindustan Motors will cut the workforce at its Uttarpara plant in West Bengal
and outsource much of its production in an attempt to reduce costs, AutoAsia Online
reported.

A voluntary retirement scheme will trim 600 employees at Uttarpara, where 9,600
people build the ancient Morris Oxford-based Ambassador sedan and the Trekker
utility vehicle, the report said.

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Hindustan Motors has lost Rs1.1 billion (US$23.5 million) over the past three
years and survives as a niche maker of the outdated Ambassador, a 1950s British
model powered by an Isuzu engine of 1980s vintage.

About 70 percent of ‘Ambys’ are sold to the government to ferry officials
and most of the rest are taxis.

The other foundation of the firm’s business is production of Mitsubishi Lancers
at a plant near Chennai. Quality is up to par but the Lancer is an expensive
vehicle in India and only 7,000 were sold last year.

Imports of a few Pajeros will begin this year but import taxes will put the
big SUV beyond the reach of most people, AutoAsia Online said.

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Last October the company announced that it would broaden the Mitsubishi line-up.

Three options were under consideration, officials said – a product for the
smaller car segment, a stripped down, low-priced version of the existing Lancer,
and a version of the Galant to compete in the premium segment.

These new products can’t come soon enough but there is no indication how the
plans are progressing. If Hindustan cannot persuade Mitsubishi to play a more
active role in India, the future for the Kolkata-based company looks bleak,
AutoAsia Online said.