Hindustan Motors sees no growth in sales of the Mitsubishi models it imports and assembles this fiscal year and also foresees profit pressures due to foreign exchange movements.

“We had total Mitsubishi sales of 4,400 vehicles last year…this year also we would be doing the same,” YVS Vijay Kumar, executive vice president, told Reuters .

“We were going rapidly in the first 6-7 months of the fiscal [year], and then the bottom fell off,” he said on the sidelines of the launch of the 2009 Montero SUV.

Car sales in India fell six times in the seven months to the end of January, hit by the global downturn and tight credit.

Sales picked up in February, rising 22% on year, but industry experts fear that the months ahead would be challenging with credit still tight and consumers worried about possible job losses.

Hindustan, maker of the iconic 1950s Morriso Oxford-based Ambassador car beloved of Indian officialdom (but under threat as increased terrorism prompts the use of more easily bullet-proofed modern models), collaborates with Mitsubishi Motors to sell the Lancer, Cedia models and the Pajero and Montero sports utility vehicles (SUV) in India.

The firm has sold around 650 Monteros in India over the past three-and-a-half years, Vijaykumar said.

He said margins were under pressure due to forex fluctuations due to the rupee’s weakness against the yen, hurting imports, Vijaykumar told Reuters.

The firm buys technology and components from Mitsubishi and manufactures and markets the products for the Indian market.

Vijaykumar said the firm was considering hiking prices of its Mitsubishi models to help offset margin pressure in April but declined to say by how much prices would rise.

The Mitsubishi vehicles for the Indian market are made at the Hindustan plant in Chennai which is running only at about 40% of its total capacity of 12,000 units, Vijaykumar said.

Managing director R Santhanam said the firm would revise its capital expenditure for fiscal 2010 due to the slowdown, but declined to elaborate.