Hindustan Motors said on Friday it was in talks to supply gear-boxes and engines to the country’s top utility vehicles maker, Mahindra, but needed to address such issues as demand before striking a deal, Reuters reported.
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Reuters said that Mahindra & Mahindra, which has a commanding domestic utility vehicles’ market share of 47%, wants to use transmissions and petrol engines made by Hindustan Motors for its Bolero utility vehicle.
Hindustan Motors, one of India’s oldest car companies and maker of the vintage-looking Morris Oxford-based Ambassador cars and Mitsubishi’s Lancer sedan is trying to grow into a supplier of engines and other parts for vehicle firms in the country, Reuters said.
“We have to do nothing special for Mahindra. They just want our existing product, not a new one, so it’s just a question of capacity and how many we can give them,” Hindustan Motor’s president and executive director Bhuwan Kumar Chaturvedi told Reuters.
“But in case they want more (than our capacity), then how do we do that? Would we need to invest more and will they join us in the investment? Those are the issues we need to discuss.”
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By GlobalDataReuters said that, earlier this year, Hindustan Motors signed an deal with Ford’s Indian unit to make engines for its Ikon sedan in the country and later with General Motors to make engines for a vehicle that it will launch locally in the future.
Reuters said that most foreign vehicle makers, including General Motors, Toyota and Fiat, import engines for the vehicles they assemble in India.
Chaturvedi told Reuters that Hindustan Motors would begin production of engines for the Ford Ikon sedan in December, some financial benefits of which will be seen in the company’s fourth quarter beginning in January but fully in the next financial year.
Reuters said Hindustan Motors was India’s car market leader in the mid-1980s, but has since lost out to foreign car makers which have entered the market with smaller and cheaper cars.
Chaturvedi told Reuters the company would introduce a 1.8 litre version of the Lancer sedan in mid-2003 as well as an upgraded bus and truck line that year. In 2002, it launched Mitsubishi’s Pajero [Shogun] SUV in India.
