Hindustan Motors, manufacturer of Ambassador (the ubiquitous Morris Oxford-based taxis) and Mitsubishi Lancer cars, is seeking to restructure its business and attract private capital to take the business forward.
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The company’s profits and growth have become increasingly based on its low-profile engine and transmission business. Initially a captive unit, the Pithampur unit now assembles powertrains for Ford, Mahindra and General Motors. This is becoming a major business for the group while vehicle manufacturing is losing money in Uttarpara – where the Ambassador is made – and the Chennai plant is running with ample spare capacity assembling small volume of Lancers.
HM is looking at hiving off the modern assembly unit in Chennai and the powertrain unit in Pithampur into a separate company and is in talks with private equity players Temasek Holdings, Actis and Chrysallis Capital to buy 26 percent stake in the new venture.
Further, HM is seeking to grow its powertrain business and is mulling the Uttarpara plant for expansion in that area.
Concerning the Chennai plant, HM has asked Mitsubishi for more model tie-ups and is in talks with other VMs as well.
Deepesh Rathore / Tilak Swarup
